The Hong Kong Police recently arrested 458 persons in connection with a massive organized money laundering scam. The scam was busted following a sting operation coordinated by the Triad. According to the region’s police, the accused allegedly used cryptocurrency traders to launder proceeds from 314 kinds of criminal activities.
The news was carried by several local media outlets on August 25. According to these reports, the arrests were made over a period of 17 days after conducting more than 400 raids across Hong Kong. The arrested accused comprised 128 women and 330 men. Of the accused, 423 were Hong Kong natives and travelers from not just mainland China but other places as well.
As per local reports, the Hong Kong police have allegedly seized more than 16 million yuan ($2.2 million) from the raids. The South China Morning Post quoted Senior Superintendent Lui Che-ho to be saying that many of the arrested accused were part of crime syndicates.
These crime syndicates convinced the accused to join their money laundering operation by luring them with monetary gains, the official said. Che-ho said the accused earned hundreds to thousands of dollars. In exchange, they had to allegedly provide their bank account details which were later used for processing the illegal funds.
He said the crime syndicates used to withdraw money from the accused’s bank accounts and then buy cryptocurrencies using the cash. Lio Che-ho’s statement highlighted the rise in instances where money launderers swap fiat currencies for crypto tokens – sometimes even the most popular cryptocurrencies – to hide the trail of their misappropriated funds.
He also said that the police had seized incriminating evidence – including documents, mobile phones, bank cards, computers, and around HK$320,000 in cash – from the accused.
Financial regulators in several countries are coming down heavily on money laundering in the crypto sector and are framing strict rules for crypto asset companies. However, Hong Kong is among the most crypto-friendly nations in the world and is trying to boost the growth of its cryptocurrency sector. Balancing the two objectives can be quite tricky. For instance, anti-money laundering regulations in Hong Kong mandate that banks carry out regular checks on their clients. However, in June earlier this year, the region’s financial regulator shot a missive to lenders and urged them to ensure that their due diligence procedures don’t end up putting ‘undue burden’ on crypto asset companies.
The intervention ended up pressuring lenders who are now hesitant to take up crypto firms as clients due to concerns over money laundering. Several leading banks like HSBC and Standard Chartered were among those who received the letter.
At the same time, Hong Kong isn’t the only region where anti-money laundering rules are restricting the growth of crypto businesses. A recent report underlined that around two-thirds of the crypto businesses who participated in its survey admitted being concerned about the possibility of flouting money laundering laws.
Analysts who have been tracking live cryptocurrency charts also feel that the clashing nature of governments’ commitment to curb money laundering in crypto trades and to become crypto-friendly destinations for businesses might impact the prospects of the many assets in the cryptocurrency market.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
