Hong Kong police have cracked down on a major crypto laundering ring involving HK$118 million, arresting 12 individuals tied to a cross-border fraud operation. The suspects, aged between 20 and 42, include two local figures and ten mainland Chinese operatives. The group is accused of using over 550 bank accounts, 560 ATM cards, and a network of crypto exchange shops to convert fraudulently obtained money into cryptocurrency in a bid to mask its origin.
Police raided multiple locations on Thursday and uncovered over HK$1 million in cash, hundreds of ATM cards, electronic devices, and financial documents. Authorities say the syndicate operated from an office in Mong Kok starting mid-2024. Recruits from the mainland allegedly used Hong Kong-based accounts to withdraw funds from ATMs and then visited crypto exchange stores to launder the money. This sophisticated laundering method reveals the mounting challenges law enforcement faces when tackling digital asset-related crimes.
The investigation revealed that approximately 500 fake bank accounts were created to execute the scheme. Surveillance operations led to the arrests of two key local members as they were withdrawing cash and heading to a crypto shop. More than HK$10 million of the laundered money was traced to at least 58 separate fraud cases, where victims lost a combined total of around HK$43.2 million.
In response, Hong Kong has tightened regulations and increased sentences for money laundering offenses by up to 15 percent since October 2023. Offenders who lend their bank accounts for illegal use now face up to 14 years in prison and fines reaching HK$5 million. Senior officials also highlighted issues such as the slow response in freezing assets like USDT, which can be exploited by criminals to transfer millions across blockchains.
These developments underline the urgent need for enhanced oversight in the crypto ecosystem to prevent similar fraud operations.
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