Hong Kong customs arrests first bust of cryptocurrency money launderers, totaling $158 million

Hong Kong Customs and Excise Department has shut down an organization that illegally laundered money through the use of cryptocurrency with a total value of up to $158 million. Police arrested four scammers and other members of the city’s first digital asset crackdown.

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Authorities say the syndicate laundered about $113 million through cryptocurrency between February 2020 and May 2021 | Photographic Image

Hong Kong arrests 4 people for laundering $158 million in cryptocurrency

The authority said the organization was accused of laundering $158 million worth of illegal money with the majority of it via USDT.

This is the result of an investigation called “Coin Breaker” when customs officers arrested the suspected mastermind, 33 years old, and three other men, aged 24-36, as directors of shell companies. The syndicate charged their criminal clients a commission of 3% to 5% to launder their dirty money. The main suspect was picked up at his public housing flat in Tin Shui Wai, while the other three were rounded up in Mong Kok, Tuen Mun, and Wong Chuk Hang.

The investigation found that more than 60% of the funds had been transferred through bank accounts in Singapore over 15 months, prompting local authorities to seek help from law enforcers there in tracking the money and its final recipients. The investigation found that the organization laundered approximately $113 million between February 2020 and May 2021.

According to Mark Woo Wai-kwan, senior director of Hong Kong customs’ consolidated criminal investigation department, money laundering operations took advantage of shell companies and 40 USDT wallets. The remaining amount, around $45 million, is believed to have been laundered through conventional methods.

“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 was broken up,” he said.

While police are still investigating the source of the laundered funds, criminals take advantage of the privacy and security features of cryptocurrency making it difficult to track down activities.

In Hong Kong, money laundering carries a maximum penalty of 14 years in prison and a fine of HK$5 million ($643,640). As money-laundering syndicates around the world increasingly turned to cryptocurrency, Woo said, Hong Kong customs would enhance its cooperation with other law enforcement agencies and regulatory bodies in order to combat the crime and maintain the city’s position as an international financial center.

However, the case pales in comparison to the city’s largest-ever money-laundering case, involving $1.6 billion (HK$13.1 billion) in 2012 caused by a 22-year-old mainland man. This man laundered money through his bank account between August 2009 and April 2010, making 4,800 deposits over an eight-month period. In January 2013, he was sentenced to 10 and a half years in prison.

At the beginning of this year, the increasing number of cases in mainland China since the fourth quarter of last year shows that criminals are blatantly using USDT in money laundering activities in China.

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