Twelve individuals have been arrested in Hong Kong and mainland China for allegedly operating a cross-border money laundering syndicate that processed HK$118 million ($15 million) through cryptocurrency and fraudulent bank accounts, according to reports by local media on May 17.
Authorities allege that the criminal network used over 500 so-called stooge accounts—bank accounts opened or provided by third parties—to receive funds obtained from fraudulent activities. The money was then funneled through local cryptocurrency exchange shops, effectively obscuring its origins.
Crypto Laundering Ring Operated from Mong Kok Apartment, Police Say
The group reportedly operated out of a rented apartment in Mong Kok, where they coordinated their laundering activities. Police say that more than HK$9.4 million ($1.2 million) of the laundered funds can be directly linked to at least 58 confirmed fraud cases.
The investigation culminated on May 15, when police surveillance tracked two suspected syndicate recruits leaving the Mong Kok base. One recruit visited a bank, while the other attempted to convert cash into cryptocurrency at a shop in Tsim Sha Tsui.
Authorities intercepted both suspects before the funds could be laundered, seizing around HK$770,000 ($98,540) in cash. Subsequently, ten more suspects, aged between 20 and 41, were arrested.
During the raids, police recovered approximately HK$1.05 million ($134,370) in cash, over 560 ATM cards, several mobile phones, and documents related to bank and crypto transactions. Senior Inspector Tse Ka-lun of the Commercial Crime Bureau stated that many of the bank accounts involved in the scheme were provided by friends and relatives of the suspects, often without understanding the criminal nature of the activities.
Hong Kong Intensifies Crypto Crackdown Amid Rising Fraud Cases
The arrests come as Hong Kong continues to grapple with a surge in fraud-related crimes. According to police data, fraud cases increased by 12% in 2024, resulting in over 10,000 arrests. Approximately 73% of these cases involved stooge accounts.
In response, the Hong Kong Cyber Security and Technology Crime Bureau (CSTCB) has intensified its crackdown on crypto-related crimes. Last week, the CSTCB announced the launch of a virtual asset analysis tool called ‘CryptoTrace,’ developed in collaboration with the University of Hong Kong.
The tool is designed to provide advanced intelligence and investigation support to frontline officers handling virtual asset cases. In March, CSTCB conducted specialized training sessions for officers to bolster their capabilities in crypto crime investigations.
$3.1 Billion Lost to Crypto Scams in 2024
Hong Kong’s efforts to combat crypto crimes come amid staggering losses in the sector. According to Titus, a local legal firm, the city-state lost approximately $3.1 billion to crypto-related scams in the first ten months of 2024.
The government has also been actively warning citizens about ongoing scams. Recently, a sophisticated scheme involving the fake “National Hong Kong Coin” was exposed. The scam misled the public into believing that the government was preparing to launch an official digital currency, causing widespread panic and financial losses.
