Hong Kong Customs Nabs Three in HK$1.8 Billion Cryptocurrency Money-Laundering Racket

A Major Crackdown on Illegal Activities

In a significant operation, Hong Kong customs officers have arrested three individuals suspected of being part of a massive money-laundering scheme involving a cryptocurrency platform and shell companies. The scheme is estimated to involve HK$1.8 billion in illicit funds.

Suspects Used Shell Companies for Illegal Transactions

The suspects allegedly used bank accounts linked to the shell companies, which had “abnormally frequent and large transactions” despite lacking tax records, import and export declarations, or physical addresses. One account received as much as HK$39 million daily and handled up to 167 transactions, authorities revealed.

Details of the Scheme

• The scheme involved the use of a cryptocurrency platform that traded Tether.
• Two of the arrested individuals are accused of handling HK$760 million - approximately 40 per cent of the funds involved in the case.
• The suspects set up five companies and 18 local bank accounts between June 2021 and July 2022 that handled more than 1,000 suspicious transactions involving funds from unknown sources.

Investigation Challenges

“This operation presented us with significant challenges due to the high degree of anonymity and lack of jurisdictional restrictions inherent in cryptocurrency transactions,” said Florence Yeung Yee-tak, commander of customs’ financial investigation division. “We relied on intelligence and conducted capital flow analysis and financial investigations to uncover this complex money-laundering scheme.”

Arrested Individuals

The three locals arrested - a 42-year-old woman and two men aged 48 and 60 - allegedly played key roles in the money-laundering process. The woman accepted transfers from different companies and cryptocurrency exchange platforms before transferring the funds to other companies or the two men involved through licensed money changers.

Seized Assets

The seized assets include mobile phones, company documents, stamps, and transaction records, with authorities still investigating the source and direction of the funds. Customs did not rule out further arrests.

Penalties for Money Laundering

Those convicted of conspiracy to deal with property known or reasonably believed to represent proceeds of an indictable offence - commonly referred to as money laundering - face a maximum penalty of 14 years’ imprisonment and a HK$5 million fine.