Hong Kong Police Arrest 12 in $15 Million Crypto Money Laundering Bust

Hong Kong police arrested 12 suspects in a major money laundering ring involving $15 million. The group used over 500 stooge bank accounts and cryptocurrency, leading to the laundering of HK$118 million. The police operation, executed on May 15, resulted in significant seizures, including cash and bank documents, amid rising fraud rates in the region.

Hong Kong police recently made significant strides in combating organised crime by arresting 12 suspects linked to a $15 million money laundering operation. This syndicate, as reported by local media, employed over 500 bank accounts and cryptocurrency to wash a staggering HK$118 million. The police operation took place on May 15 and involved the capture of nine men and three women across mainland China and Hong Kong.

The suspects allegedly orchestrated a scheme involving the recruitment of individuals to open stooge bank accounts. These accounts served as conduits for money sourced from various fraudulent activities. Once the illicit funds had been deposited, they converted them into cryptocurrency via local exchange shops, effectively laundering the money, as highlighted in an article by Hong Kong Commercial Daily on May 17.

Authorities revealed the syndicate operated from a rented residential flat in Mong Kok. Alarmingly, among the $15 million laundered, over $1.2 million was said to stem from 58 separate fraud incidents. This incident underlines the increasing complexity of money laundering schemes making use of digital currencies.

Details surrounding the arrests indicate that police had been conducting surveillance prior to the operation on May 15. They noticed two individuals exiting the Mong Kok base: one visited a bank while the other headed to an ATM. Both were apprehended after converting cash to crypto in Tsim Sha Tsui. Law enforcement seized approximately HK$770,000 ($98,540) in cash right before it could be laundered. The ten remaining suspects, aged between 20 and 41 years, were apprehended soon after.

In total, authorities seized about HK$1.05 million ($134,370) in cash, over 560 ATM cards, several mobile phones, and numerous bank records and documents linked to cryptocurrency transactions. Senior Inspector Tse Ka-lun from the Commercial Crime Bureau commented that the criminals frequently exploited bank accounts belonging to relatives and friends to laundering stolen money.

Statistics reveal a worrying trend in Hong Kong, with a recorded 12% rise in fraud cases year-on-year as of 2024. In response, local authorities have executed over 10,000 arrests connected to fraud, with around 73% of those arrests involving manufacturers of stooge accounts, highlighting the scale of the problem.

This crackdown comes amid Hong Kong’s ongoing efforts to develop a regulatory framework for cryptocurrencies. The Securities and Futures Commission (SFC) has recently unveiled new regulations targeting crypto exchanges offering staking services and a detailed roadmap to enhance market access and compliance while encouraging industry engagement. As Hong Kong aims to establish itself as a burgeoning crypto hub, these efforts are crucial.