Hong Kong Authorities Bust $1.5 Billion Crypto-Backed Money Laundering Ring—Here’s How

In a bust that once again reveals the dark side of cryptocurrency usage, the Hong Kong Customs cracked down on a sophisticated money laundering operation, seizing assets and making several arrests.

According to the press release by the Hong Kong Government, the operation to bust this money laundering scheme is dubbed “Fencing,” and it particularly targeted a syndicate accused of laundering about $1.5 billion through shell companies and cryptocurrencies.

Details Of The Crypto-Backed Laundering Operation

The successful crackdown of the aforementioned money laundering scheme occurred on August 7 when the Customs officials in Hong Kong executed an extensive operation, apprehending four individuals linked to crypto-backed laundering activities.

As disclosed in the press release, these suspects aged 31 to 66 are believed to be “key players” in the syndicate, orchestrating complex transactions across Asia-Pacific.

The investigation revealed that from August 2020 to August 2022, the group managed suspicious funds amounting to roughly $1.5 billion, funneling them through various trading companies.

According to the press release, Hong Kong’s legal framework under the Organized and Serious Crimes Ordinance (OSCO) played a crucial role in the operation, with the suspects facing severe penalties if convicted. This includes a fine of up to $5 million and up to 14 years in prison.

The report read:

 Under the OSCO, a person commits an offence if he or she deals with any property knowing or having reasonable grounds to believe that such property, in whole or in part, directly or indirectly represents any person’s proceeds of an indictable offence. The maximum penalty upon conviction is a fine of $5 million and imprisonment for 14 years while the crime proceeds are also subject to confiscation.

Furthermore, assets linked to the crime, totaling around $2.2 million, have been frozen in the legal proceedings. The operation also involved searches across multiple properties, where officials confiscated evidence, including mobile phones, computers, and cryptocurrency wallets.

Just as in any investigation, such items can be quite useful for the authorities in piecing together the syndicate’s operations and precisely tracing the broader network potentially involved in these illegal activities.

Hong Kong Continous Crackdown

Notably, this latest bust is just one of the many crackdowns the Hong Kong authorities have initiated over the past months. With the global crypto market growing rapidly in adoption, scammers have continued to prey on this finance sector in any way possible.

Just last month, the Hong Kong police four people were arrested due to their involvement in defrauding unsuspecting victims with fake cash.

Before that, the Hong Kong Securities and Futures Commission (SFC) warned investors to stay away from three entities suspected of engaging in fraudulent activities related to virtual assets or operating without a license.

Featured image created with DALL-E, Chart from TradingView