18-5-2025 – Hong Kong authorities have dismantled a sophisticated cross-border money laundering syndicate, apprehending 12 individuals orchestrating a scheme that funnelled HK$118 million ($15 million) through cryptocurrency and a sprawling network of over 500 illicit bank accounts. The operation, exposed on 15 May, has cast a spotlight on the evolving nexus of fraud and digital assets, as reported by local media.
The syndicate, comprising nine men and three women aged 20 to 41, was apprehended across Hong Kong and mainland China. Operating from a rented residential unit in the bustling Mong Kok district, the group meticulously planned its illicit activities, leveraging a web of “stooge” bank accounts—often opened by recruits or their unwitting friends and family—to siphon proceeds from fraud. These funds were swiftly converted into cryptocurrency at exchange shops in areas like Tsim Sha Tsui, obscuring their illicit origins. Of the laundered sum, over $1.2 million was traced to 58 fraud cases reported in Hong Kong.
The breakthrough came during a police surveillance operation on 15 May, when officers trailed two recruits from the Mong Kok base. One was observed visiting a bank, another an ATM, before both converged at a Tsim Sha Tsui crypto exchange shop to transform cash into digital currency. Police swooped in, arresting the pair and seizing HK$770,000 ($98,540) in cash. Subsequent raids netted the remaining 10 suspects, alongside HK$1.05 million ($134,370) in cash, over 560 ATM cards, mobile phones, bank documents, and records of crypto transactions.
Senior Inspector Tse Ka-lun of the Commercial Crime Bureau highlighted the syndicate’s reliance on proxy bank accounts, a tactic increasingly prevalent in Hong Kong’s fraud landscape. In 2024 alone, the city recorded a 12% surge in fraud reports, with over 10,000 arrests linked to such crimes—73% involving individuals holding stooge accounts. This bust underscores the challenges facing Hong Kong as it balances its ambition to become a global crypto hub with the need to curb financial crime.
Amid the crackdown, Hong Kong is advancing its cryptocurrency regulatory framework to foster innovation while safeguarding consumers. In April, the Securities and Futures Commission introduced rules for crypto exchanges offering staking services. Earlier, in February, the regulator unveiled a roadmap to bolster market access, streamline compliance, diversify product offerings, fortify crypto infrastructure, and deepen industry ties. These efforts reflect the city’s determination to cement its status as a leader in digital finance, even as it confronts the darker undercurrents of the crypto world.
