Hong Kong authorities have successfully busted a cross-border crypto laundering network that allegedly processed approximately HK$118 million (US$15 million) in illicit funds.
The enforcement action resulted in a dozen arrests as officials intensified their campaign against individuals who monetized their personal banking credentials.
Law enforcement conducted a series of coordinated raids on Thursday led by the Commercial Crime Bureau. This led to the detention of nine males and three females between the ages of 20 and 40 across several Hong Kong districts.
The operation obtained evidence such as HK$1.05 million in cash currency, a collection of over 560 bank cards, multiple communication devices, and financial documentation.
Investigators reveal crypto laundering operation
According to SCMP, investigators revealed that the criminal enterprise had been systematically recruiting citizens from mainland China since mid-2023 to establish fraudulent banking relationships with conventional and digital financial institutions throughout Hong Kong.
A senior police official explained that these accounts functioned as conduits for criminal proceeds from various scam operations. The recruited individuals would then withdraw physical cash using various payment cards and transport these funds to cryptocurrency exchange locations where the money would be converted to crypto.
Authorities stated that among those in custody were two Hong Kong residents identified as primary organizers of the operation. They were captured alongside ten mainland Chinese nationals who allegedly served as account fronts for the scheme.
Preliminary financial analysis suggests the organization funneled approximately HK$118 million through a network of more than 550 domestic banking accounts and crypto transactions.
Investigators have currently traced HK$10 million of these laundered assets to 58 documented fraud cases. Also, affected victims reported total financial damages of HK$43.2 million.
The criminal network had reportedly established an operational headquarters in a Mong Kok residential unit beginning in early 2024. This served as housing for mainland recruits while they awaited directives to process incoming fraudulent transfers.
Law enforcement officials confirmed they advocate for improved judicial penalties against individuals who provide their banking credentials for illicit financial activities. Under current Hong Kong regulations, money laundering convictions can result in maximum sentences of 14 years’ incarceration and financial penalties up to HK$5 million.
Crypto crimes and scams have been on the rise not just in Hong Kong but also globally. A man from Wellington was arrested in Auckland in connection with an international investigation into a cryptocurrency operation. The operation was suspected of defrauding seven victims of approximately $265 million (NZD $450 million).
