HONG KONG – Hong Kong customs officials today said they have dismantled a money-laundering syndicate using cryptocurrency to process some HK$1.2 billion (RM650 million) in illegal funds, in what they said is the first successful operation of its kind.
“It is the first time in Hong Kong that a money-laundering ring involved in using cryptocurrency to ‘wash’ dirty cash and conceal the source of criminal assets has been broken up,” the department’s Mark Woo Wai-kwan told reporters.
Investigators said four men – including the alleged local mastermind of the syndicate – have been arrested and bailed, while some HK$20 million has been frozen.
The men opened various local bank accounts with shell companies and made transactions through a virtual currency exchange trading platform to turn laundered crypto into real cash for clients.
Around 60% of the funds were channelled through bank accounts in Singapore over the last 15 months.
The group was trading in privacy coins issued by the cryptocurrency tether, said officials.
Cryptocurrencies are a boon to criminal networks and launderers because they are harder to trace than conventional cash transactions.
But, law enforcement agencies are making some headway.
On Tuesday, British police announced a record seizure of £180 million (RM1 billion) in cryptocurrency suspected of having been used by criminal enterprises.
Last month, China said it arrested more than 1,000 people for using profits from crime to buy cryptocurrencies.
Beijing has turned a sharp eye on cryptocurrency in recent months as it widens a regulatory crackdown on the tech sector.
Cryptocurrency trading is banned in China, and authorities recently closed mines and warned banks to halt the related transactions.
Before the closures, Chinese bitcoin mines powered nearly 80% of the global trade in cryptocurrencies.
As a business-friendly global financial hub, Hong Kong has long been something of a laundering hotspot.
Authorities said they take the issue seriously and do their best to prosecute criminal enterprises.
The city recently tightened oversight on cryptocurrency trading, requiring all platforms to register with a local watchdog and be subjected to rules against money laundering and counterterrorism financing.
However, transparency campaigners have long complained that lax regulations make Hong Kong an easy place to launder money and set up shell companies.
In January, seven former and current bank employees were arrested as part of an operation against an US$810 million (RM3.4 billion) international money-laundering syndicate, in what authorities had said was their biggest bust in years. – AFP, July 15, 2021
