Source: Cointelegraph
Original: “Hong Kong Police Busts $15 Million Crypto Laundering Ring, Arrests 12 People”
Police in Hong Kong have arrested 12 individuals involved in a cross-border money laundering scheme that used cryptocurrency and over 500 puppet bank accounts to launder HK$118 million (approximately $15 million), local news media reported.
The criminal group was dismantled on May 15, with police arresting 9 men and 3 women in mainland China and Hong Kong.
According to the Hong Kong Commercial Daily on May 17, the suspects allegedly recruited others to open bank accounts to receive proceeds from fraud cases, which were then converted into cryptocurrency at cryptocurrency exchanges to launder the illegal funds.
The criminal organization rented a residential unit in the Mong Kok community of Hong Kong to plan and carry out money laundering activities. Of the $15 million laundered, over $1.2 million was related to 58 reported fraud cases.
The operation stemmed from police surveillance on May 15, when two newly recruited individuals left the group's base in Mong Kok—one heading to a bank and the other to an ATM—before both proceeded to a cryptocurrency exchange in Tsim Sha Tsui to convert cash into cryptocurrency.
Police arrested the two on the spot, seizing approximately HK$770,000 (about $98,540) in cash before the funds were laundered. The remaining 10 suspects, aged between 20 and 41, were also arrested shortly thereafter.
Police confiscated approximately HK$1.05 million (about $134,370) in cash, over 560 ATM cards, multiple mobile phones, bank documents, and records related to cryptocurrency transactions.
Senior Inspector Tse Ka-lun of the Hong Kong Commercial Crime Bureau stated that these individuals frequently used the bank accounts of friends and family to launder stolen funds.
Fraud cases reported in Hong Kong increased by 12% year-on-year in 2024, with authorities conducting over 10,000 arrests related to fraud. About 73% of the arrests involved individuals holding puppet bank accounts.
This crackdown comes as Hong Kong continues to roll out its cryptocurrency regulatory framework, aimed at supporting local innovation, protecting consumers, and establishing itself as a cryptocurrency hub.
The Hong Kong Securities and Futures Commission (SFC) introduced new regulations in April for cryptocurrency exchanges providing staking services. Two months prior, the securities regulator launched a roadmap aimed at improving market access, optimizing compliance, expanding product offerings, strengthening cryptocurrency infrastructure, and building relationships with industry participants.
Related: AICoin Head: Stablecoin Regulation is the "Next Catalyst" for the Crypto Industry
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