The Hong Kong police force has revealed the details of a cross-border money laundering scheme involving cryptocurrencies and over 500 fake bank accounts. The operation, which was responsible for laundering an estimated HK$118 million ($15 million), was exposed by local news agencies.
On May 15, 12 suspects were arrested in both mainland China and Hong Kong. According to reports from the Hong Kong Commercial Daily, these individuals had been using others to create bank accounts for receiving proceeds from fraudulent activities. The funds were then converted into cryptocurrencies at various exchanges, effectively washing the illicit money.
The criminal syndicate had established a base in a residential unit within the Mong Kok neighborhood of Hong Kong. From here, they planned and executed their money laundering operations. Of the total laundered amount, over $1.2 million was connected to 58 individual fraud cases.
Police surveillance on May 15 led to the arrest of two recruits leaving the Mong Kok base. One was observed visiting a bank, whilst the other was seen at an ATM. Both were apprehended while attempting to convert the cash into cryptocurrencies at a local crypto exchange.
Before the funds could be laundered, police seized approximately HK$770,000 ($98,540) in cash. The remaining 10 suspects, aged between 20 and 41, were swiftly arrested. Law enforcement officers also confiscated HK$1.05 million ($134,370) in cash, over 560 ATM cards, multiple mobile phones, and bank documents and records related to cryptocurrency transactions.
Hong Kong law enforcement noted a 12% increase in fraud reports in 2024, leading to over 10,000 fraud-related arrests. Interestingly, around 73% of these arrests involved individuals who held fake bank accounts.
This case is part of a broader crackdown as Hong Kong continues to establish its cryptocurrency regulatory framework. This is aimed at fostering local innovation, protecting consumers, and positioning itself as a hub for cryptocurrency activities.
