Source: Cointelegraph
Original text: (Hong Kong police crack down on a USD 15 million cryptocurrency money laundering gang, arresting 12 people)
The Hong Kong police arrested 12 individuals involved in a cross-border money laundering scheme that used cryptocurrencies and over 500 puppet bank accounts to launder HKD 118 million (about USD 15 million), local news media reported.
The criminal gang was dismantled on May 15, with the 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 the proceeds from fraud cases, and then converted these funds into cryptocurrency at exchanges to launder the illegal money.
The criminal organization rented a residential unit in the Mong Kok community of Hong Kong for planning and executing money laundering activities. Of the USD 15 million laundered, over USD 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 gang's base in Mong Kok—one went to the bank, while the other went to an ATM—after which both headed to a cryptocurrency exchange in Tsim Sha Tsui to convert cash into cryptocurrency.
The police arrested the two on the spot and seized approximately HKD 770,000 (about USD 98,540) in cash before the funds were laundered. The remaining 10 suspects, aged between 20 and 41, were also arrested immediately.
The police seized approximately HKD 1.05 million (about USD 134,370) in cash, over 560 ATM cards, multiple mobile phones, banking 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 making over 10,000 arrests related to fraud. Approximately 73% of the arrests involved individuals holding puppet bank accounts.
This crackdown coincides with Hong Kong continuing 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 ago, 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: Aptos Head: Stablecoin regulation is the "next catalyst" for the crypto industry.
