Hong Kong: $3.9 Billion in Fraudulent Transactions Laundered Through Banks and Cryptocurrency Wallets Since 2017

Scammers Take Advantage of Hong Kong’s Financial Infrastructure for Money Laundering

Nearly HK$29 billion ($3.9 billion) in ill-gotten gains have been laundered through Hong Kong’s local bank accounts and cryptocurrency wallets since 2017, according to a police source. This alarming figure illustrates the city’s allure to fraudsters seeking to cleanse their dirty money and blend it with legitimate transactions.

Online banking, electronic payments, and cryptocurrency wallets have become increasingly lucrative avenues for money laundering due to their convenience and worldwide reach.

Types of Financial Fraud in Hong Kong

Fake or Spoofed Emails

One common scam involves the use of fake or spoofed emails that appear to be from reputable financial institutions or online payment providers. With these emails, scammers solicit personal information to gain access to victims’ bank accounts. Once taken control of an account, scammers can easily transfer funds to offshore accounts or purchase cryptocurrencies.

The growing concern among law enforcement agencies worldwide is the integration of cryptocurrencies into money laundering schemes. Anonymity and decentralization make it easier for scammers to move large sums of money across borders with minimal detection. In 2021, HK$53 million in reported losses from cryptocurrency-related fraud cases were recorded.

Law Enforcement Responses and Prevention

Anti-Deception Coordination Centre (ADCC)

To combat financial fraud, the Anti-Deception Coordination Centre (ADCC) has received an average of 226 stop-payment requests per month related to fraudulent transactions since January 2021. This figure represents a significant increase from 189 per month in 2020.

Collaborative Efforts from Law Enforcement Agencies, Financial Institutions, and International Partners

Police in Hong Kong are working together with financial institutions and international partners to improve detection and response measures against financial fraud.

Regulatory Oversight by the Hong Kong Monetary Authority (HKMA)

The Hong Kong Monetary Authority (HKMA) has strengthened its regulatory oversight of banks and other financial institutions by introducing new licensing requirements for virtual asset service providers (VASPs) and establishing a regulatory framework for the industry to promote better transparency and consumer protection.

Advice for Hong Kong Residents

Despite these efforts, financial fraud remains a significant threat to Hong Kong. Residents are urged to exercise caution when dealing with unsolicited emails, offers, or requests for personal information and report any suspected fraudulent activity to the police or ADCC.