Hong Kong Police Dismantle $15M Crypto Laundering Syndicate Involving Over 500 Bank Accounts

Hong Kong authorities have arrested 12 individuals tied to a $15 million money laundering operation that used cryptocurrency and more than 500 bank accounts to process illicit funds. The cross-border syndicate was busted on May 15 in a coordinated effort between Hong Kong and mainland Chinese law enforcement.

According to local reports, the group laundered over HK$118 million (~$15M) in criminal proceeds by converting cash into crypto through local crypto exchange shops. The operation was orchestrated from a rented residential unit in Mong Kok, a dense commercial area in Hong Kong.

How the Scheme Worked

The suspects allegedly recruited others to open personal bank accounts, which were then used to receive fraudulent funds from multiple cases. These funds were quickly converted to crypto to obscure their origin. At least 58 fraud cases have been directly linked to the ring, totaling more than $1.2 million in confirmed stolen funds.

On May 15, police surveillance teams followed two of the recruits leaving the Mong Kok base — one visited a bank, the other used an ATM — before both went to a crypto exchange shop in Tsim Sha Tsui to convert the cash. Authorities arrested them in the act, seizing HK$770,000 (~$98,500) in cash.

Further Arrests and Seizures

Following the initial arrests, another 10 individuals aged 20 to 41 were apprehended shortly after. Police recovered approximately HK$1.05 million (~$134,370) in cash, over 560 ATM cards, multiple mobile phones, and documents tied to bank and crypto transactions.

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Senior Inspector Tse Ka-lun of the Commercial Crime Bureau noted that suspects often used bank accounts belonging to friends and family members, effectively spreading the risk and making detection harder.

Context: Rising Fraud and Crypto Regulation in Hong Kong

This operation comes amid a surge in fraud-related activity in Hong Kong. In 2024, fraud reports rose 12% year-over-year, with over 10,000 arrests made. Of those, 73% involved stooge account holders, highlighting the growing role of proxy banking in money laundering.

Meanwhile, Hong Kong continues to strengthen its regulatory framework for digital assets. The Securities and Futures Commission (SFC) introduced new rules in April for crypto exchanges offering staking services, building on its broader effort to turn Hong Kong into a regulated crypto hub.

Earlier this year, the SFC rolled out a roadmap aimed at:

• Enhancing market access

• Improving compliance standards

• Expanding crypto product offerings

• Strengthening blockchain infrastructure

• Fostering closer industry collaboration