A crypto-laundering ring was busted in Hong Kong after HK$118M was laundered through shell accounts, crypto exchanges, and bank cards.

Hong Kong police have busted a cross-border crypto-laundering syndicate after arresting 12 suspects.

The group allegedly laundered HK$118 million (about $15 million USD) through a network of over-the-counter crypto exchange shops and traditional banks.

Authorities say the money came from various scams and was converted into cryptocurrency to hide its origin.

The suspects include two prominent locals and ten mainland Chinese workers, aged between 20 and 42.

The police discovered that the syndicate operated from shell accounts and multiple bank cards to hide illegal funds. The situation highlights the difficulties faced by the region’s authorities in preventing crypto laundering.

Crypto-laundering ring busted in Hong Kong

On Thursday, the Commercial Crime Bureau conducted raids at multiple locations in Hong Kong. Police found more than HK$1.05 million in cash, more than 560 ATM cards, various electronic devices and financial documents.


As a result, the city’s Superintendent of Banks Shirley Kwok-Ching-yi noted that mainlanders were involved in a scheme to set up accounts in Hong Kong banks.

Superintendent Kwok said, “These accounts were allegedly used to obtain illicit funds from various fraud schemes.

The suspects withdrew cash using various bank cards and transferred the money to virtual asset exchange stores. There, the funds were converted into cryptocurrency, and as a result, crypto laundering was facilitated.

Chief Inspector Low Yuen Shan added that the syndicate had operated an office in Mong Kok since mid-2024. Mainland recruiters later stayed at the location and awaited instructions to process the illicit funds.

Scope of crypto laundering activities

After investigation, the police found that the group laundered more than HK$118 million using 550 bank accounts and transactions involving virtual assets.

In addition, following surveillance, the police arrested two key local members when they withdrew cash from ATMs and deposited it at exchange stores.

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As a result, among these crypto fraud cases, approximately 58 incidents involved more than HK$10 million, and victims lost an estimated HK$43.2 million.

The syndicate had about 500 fake accounts and used them for money laundering. They will first withdraw funds from ATMs using someone else's registered cards, then transfer the money to crypto exchange platforms.

Regulatory and law enforcement response

However, Hong Kong police have increased their efforts to combat fraud and money laundering in the digital asset sector.

Furthermore, from October 2023, penalties for money laundering offenses have increased by 10 to 15 percent, with sentences ranging from three months to 18 months in prison.

At the same time, new reports have identified flaws in the cryptocurrency system, one of which is the funds from Tether. The delay in freezing the .

Because of this delay, more than $78 million worth of USDT has been reported to have moved between the Ethereum and Tron blockchains since 2017. Hence, these flaws make crypto-laundering more likely, which requires stricter monitoring.

Amid rising cases of crypto-laundering, Senior Inspector Tse Ka-lin has warned that those who lend their bank accounts for money laundering could face up to 14 years in prison and a HK$5 million fine under the Organized and Serious Crimes Ordinance.

The authorities emphasized that strict measures are necessary to prevent the use of personal bank accounts in illegal financial activities.

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