In a recent bust of a money laundering case involving cryptocurrencies, Hong Kong authorities have arrested four people. Reportedly, the suspects have laundered a massive HK$1.2 billion ($150 million) funneled through bank accounts in Singapore over the last 15 months.
Taking note of this, the Hong Kong Customs had launched operation “Coin Breaker” last week on July 8. Senior Superintendent Mark Woo Wai-kwan of customs’ syndicate crimes investigation bureau said:
“It is the first time in Hong Kong that a money-laundering ring involved in using cryptocurrency to wash dirty cash and conceal the source of criminal assets was broken up”.
Wai Kwan also noted that the nature of the scam and its execution has made it even more difficult to trace. The alleged mastermind was controlling three shell companies to launder this money. The authorities have thus frozen HK$20 million in suspicious bank accounts believed to be a part of these criminal proceeds.
A Fifteen Month Long Scam
The alleged syndicate behind this scam has been operating since February 2020. Speaking to the SCMP publication, Senior Superintendent Woo said:
“The three men were recruited by the syndicate with monetary rewards, and each received between HK$10,000 and HK$20,000 a month”.
Besides, the shell companies had opened three e-wallet accounts with a local crypto trading platform. Here, they would trade the so-called privacy coins against stablecoin Tether. These virtual coins involved in these transactions used 40 such e-wallet accounts. The syndicate then cashed out these coins into eight shell accounts belonging to the three shell companies.
The law enforcement notes that the syndicate offered 3-5% commission to the criminal clients to launder their money. A total of HK$880 million have been laundered in digital currencies. The rest of $350 million has been laundered through conventional methods.
Crypto scams are on a steep rise following the crypto market boom this year. Last month, the founder of Africa’s popular crypto investment app Africrypt ran away in a $3.6 billion Bitcoin scam. Similarly, U.K’s FCA unearthed a few million dollars worth of crypto scam last week.