Crypto Laundering Ring Busted in Hong Kong as 12 Suspects Arrested

Hong Kong police have dismantled a $15 million crypto laundering ring, arresting 12 suspects involved in a cross-border money laundering operation.

The syndicate used over 500 "stooge" bank accounts and more than 560 ATM cards to launder HK$118 million (about $15 million USD) through a network of traditional banks and over-the-counter cryptocurrency exchange shops.

The group operated from a rented residential unit in the Mong Kok neighborhood of Hong Kong, where they planned and coordinated their laundering activities.

They recruited others, including friends and relatives, to open bank accounts to receive proceeds from fraud cases, which were then converted into cryptocurrency to obscure the origins of the illicit funds.

Police linked more than HK$9.4 million (around $1.2 million) of the laundered money to at least 58 confirmed online fraud cases.

The operation was uncovered following surveillance on May 15, when two syndicate recruits were caught attempting to convert cash into cryptocurrency at a crypto exchange shop in Tsim Sha Tsui.

Authorities seized approximately HK$770,000 ($98,540) in cash at that time, and during subsequent raids, around HK$1.05 million ($134,370) in cash, hundreds of ATM cards, mobile phones, and documents related to bank and crypto transactions were recovered.

The suspects include nine men and three women aged between 20 and 42, with arrests made in both Hong Kong and mainland China. Senior Inspector Tse Ka-lun of the Commercial Crime Bureau noted that many bank accounts used were provided by associates who were often unaware of the full extent of the criminal activities.

This crackdown comes amid a 12% rise in fraud reports in Hong Kong in 2024, with over 10,000 related arrests. The authorities are intensifying efforts to combat crypto-related financial crimes while simultaneously developing regulatory frameworks to support cryptocurrency innovation and consumer protection in the region.

The operation highlights the sophisticated use of cryptocurrency and multiple bank accounts to launder proceeds from scams, and the coordinated law enforcement response to tackle such illicit activities in Hong Kong.

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