Hong Kong crypto laundering ring busted – 4 arrested

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A massive Hong Kong crypto laundering ring, which used the Tether stablecoin for transferring funds has been shut down by authorities.

A massive Hong Kong crypto laundering ring, which used the Tether stablecoin for transferring funds has been shut down by authorities.

Investigators said four men, including the alleged local mastermind of the syndicate had been arrested and bailed while some HK$209 million had been frozen.

Hong Kong customs officials said they had dismantled a money laundering syndicate that used cryptocurrency to process some HK$1.2 billion ($209 million) in illegal funds, which was a 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 was broken up,”

Senior Superintendent Mark Woo Wai-kwan

Hong Kong crypto laundering suspects used Tether

The Hong Kong crypto laundering suspects 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 per cent of the funds had been channelled through bank accounts in Singapore over the last 15 months. The group were trading in privacy coins issued by the cryptocurrency Tether.

Cryptocurrencies are a boon to criminal networks and launderers because they are even harder to trace than conventional cash transactions. But law enforcement agencies are making some headway in Hong Kong.

British police announced they had seized a record £180 million ($250 million) in cryptocurrency that was suspected of having been used in criminal enterprises.

Last month, China said it had arrested more than a thousand people for using the profits from crime to buy cryptocurrencies. Beijing has turned a sharp eye on cryptocurrency in recent months as it widens its regulatory crackdown on the tech sector.

Cryptocurrency trading is banned in China and authorities have recently closed mines and warned banks to halt related transactions. Before the closures, Chinese bitcoin mines powered nearly 80 percent of the global trade in cryptocurrencies.

As a business friendly global financial hub, Hong Kong has long been something of a money laundering hotspot. Authorities say 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 subject to anti money laundering and counter terrorism financing rules. But 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 a US$810 million international money-laundering syndicate, in what authorities said was their biggest bust in years.

Dylan Leighton

Dylan Leighton

Dylan Leighton is an composer, music producer, sound designer and mix engineer from the United Kingdom. Making music for over 40 years, he creates music for corporate clients, film and video, and his own personal enjoyment. Writing under the artist name Kalliste, he has composed in just about every genre, from hip-hop to funk to classical.

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