- Mass arrests
- Hong Kong police are cracking down on cryptocurrencies while expanding their crypto sector
Hong Kong police arrested 458 people linked to an extensive organized crime network that practiced money laundering through cryptocurrency. It is reported that this resulted in the disruption of a Triad-controlled operation that used cryptocurrency transactions to launder the proceeds of 314 crimes.
Mass arrests
According to Hong Kong media reports published on August 25, there was a string of arrests over a seventeen-day period. During this period, local police arrested 330 men and 128 women in 400 separate raids throughout the city. The suspects included 423 Hong Kong and mainland Chinese nationals, as well as people from other countries.
According to official information, during this operation, law enforcement intercepted over 16 million yuan (2.2 million US dollars). However, these are pennies compared to the 470 million yuan (64.5 million US dollars) the organization is suspected of laundering.
In a statement, Senior Superintendent Louis Che-ho said many of those arrested were used by organized crime syndicates.
He commented, “The crime syndicates lured them into money laundering activities with cash rewards. They were paid hundreds to thousands of dollars each for handing over bank account details used to process illegal funds.”
The group laundered the dirty money by withdrawing it from bank accounts. They then used the cash to buy cryptocurrencies.
Hong Kong police are cracking down on cryptocurrencies while expanding their crypto sector
Louis Che-ho emphasizes that such money laundering groups often exchange fiat for cryptocurrency to help hide traces of illicit funds.
Regulatory authorities all around the world have imposed tough anti-money laundering (AML) regulations on crypto-related companies. Hong Kong, too, is trying to develop its crypto sector. And sometimes the two tasks seem to be at odds with each other. For example, Hong Kong’s anti-money laundering rules require banks to conduct so-called “due diligence” checks on their customers.
But in June, Hong Kong’s financial regulator sent a letter to lenders emphasizing that due diligence procedures should not impose an “undue burden” on crypto businesses. Essentially, lenders, who are reluctant to accept crypto firms as clients due to AML inspection issues, are under pressure to make them friendly to crypto firms. Major banks including Standard Chartered and HSBC were among the recipients of the letter.
