Authorities in Hong Kong and mainland China have detained twelve individuals suspected of engaging in a cross-border money laundering scheme, which allegedly funneled HK$118 million (approximately $15 million) through various cryptocurrency transactions and numerous fraudulent bank accounts, as reported by local media on May 17.
The Hong Kong Commercial Daily revealed that these criminals operated a network of over 500 “stooge accounts”—bank accounts held or facilitated by third parties—to accumulate illicit funds acquired from various fraud schemes.
The illicit proceeds were subsequently channeled through local cryptocurrency exchanges, obscuring their original sources.
Operation Traced to Mong Kok Apartment, Say Officials
Law enforcement officials have indicated that the syndicate was based in a rented Mong Kok apartment, where they strategized and conducted their money laundering efforts.
Investigators have linked more than HK$9.4 million (around $1.2 million) of the laundered money to at least 58 confirmed fraud cases.
The crackdown escalated on May 15 when police monitored two suspected operators leaving the Mong Kok location—one stopped at a bank, while the other visited an ATM.
Both suspects tried to convert cash into cryptocurrency at a store in Tsim Sha Tsui but were intercepted by law enforcement before they could complete the transactions, leading to their immediate arrests along with the seizure of approximately HK$770,000 (about $98,540) in cash.
Shortly after, ten more suspects, aged between 20 and 41, were taken into custody.
Authorities discovered around HK$1.05 million (approximately $134,370) in cash, over 560 ATM cards, and multiple mobile phones and documents related to bank and cryptocurrency transactions during the raids.
Senior Inspector Tse Ka-lun from the Commercial Crime Bureau explained that many of the bank accounts implicated in the operation were opened by acquaintances of the suspects, often without their knowledge of the criminal undertakings involved.
The arrests are set against the backdrop of a notable rise in fraud-related offenses within the city. Reports of such crimes increased by 12% in 2024, resulting in over 10,000 arrests linked to fraud.
HK police arrest 12 suspects in $15M crypto laundering tied to 500+ bank accounts and 58 fraud cases
$15M isn’t even that much tbh, barely worth the hassle. pic.twitter.com/qZSaMEbJB2
— Gordon (@AltcoinGordon) May 18, 2025
Law enforcement emphasized that nearly 73% of the reported cases involved individuals managing stooge accounts.
Hong Kong Steps Up Crypto Regulation Efforts
This law enforcement initiative is part of broader measures by Hong Kong to enhance regulatory oversight of its cryptocurrency landscape.
Recently, the Hong Kong Cyber Security and Technology Crime Bureau (CSTCB) unveiled a virtual asset analysis tool aimed at bolstering investigations into crypto-related criminal activities.
The tool, named ‘CryptoTrace,’ was developed in partnership with the University of Hong Kong and provides “advanced intelligence and investigation support to crime investigation units.”
The Bureau noted that they held training sessions for using the CryptoTrace tool during March to improve the proficiency of frontline officers in addressing virtual asset cases.
In addition to tackling crypto-associated crimes, the CSTCB has engaged with a variety of stakeholders across different sectors.
A recent report from Titus, a legal firm in Hong Kong, stated that the city lost an astonishing $3.1 billion in the first ten months of 2024 due to cryptocurrency scams.
Moreover, the government recently unveiled a complex scam concerning a fictitious “National Hong Kong Coin,” which misled citizens into believing an official digital currency was imminent.
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