Hong Kong police arrested 12 people involved in a cross-border money laundering scheme that relied on crypto and over 500 stooge bank accounts to launder HK$118 million ($15 million), local news outlets reported.
The syndicate was dismantled on May 15, resulting in the arrest of nine men and three women in mainland China and Hong Kong.
The suspects allegedly recruited others to open bank accounts to receive proceeds from fraud cases, which were then converted into crypto at crypto exchange shops to launder the illicit funds, Hong Kong Commercial Daily reported on May 17.
The criminal organization rented a residential unit in the Hong Kong neighborhood of Mong Kok to plan and carry out its money laundering activities. Of the $15 million laundered, more than $1.2 million was linked to 58 reported fraud cases.
Caught in action
The bust followed police surveillance on May 15, when two recruits left the syndicate’s Mong Kok base — one visiting a bank, the other an ATM — before both went to convert the cash into crypto at a crypto exchange shop in the neighborhood of Tsim Sha Tsui.
Police arrested both individuals on the spot, seizing around HK$770,000 ($98,540) in cash before the funds could be laundered. The other 10 individuals, aged between 20 and 41, were arrested soon after.
Police seized approximately HK$1.05 million ($134,370) in cash, over 560 ATM cards, multiple mobile phones, bank documents and records related to crypto transactions.
Senior Inspector Tse Ka-lun of Hong Kong’s Commercial Crime Bureau claimed that the individuals often used bank accounts from their friends and family to launder the stolen funds.
Hong Kong reported a 12% year-on-year increase in fraud reports in 2024, with authorities making more than 10,000 fraud-related arrests. Of those arrests, around 73% involved individuals who held stooge bank accounts.
Related: DOJ charges 12 more gamer-turned $263M Bitcoin robbers
The crackdown comes as Hong Kong continues to roll out its crypto regulatory framework to support local innovation, protect consumers and establish itself as a crypto hub.
Hong Kong’s Securities and Futures Commission introduced new rules for crypto exchanges offering staking services in April. Two months earlier, the securities regulator rolled out a roadmap to improve market access, optimize compliance, expand product offerings, strengthen crypto infrastructure and foster relationships with industry players.
Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight
Originally posted on Cointelegraph.com News
