Hong Kong customs detain two suspects in $ 380 million cryptocurrency laundering scheme

  • Hong Kong authorities have detained two suspects in money laundering through various crypto exchanges and bank accounts.
  • Regulators continue to chase these criminals, with market analysts proposing even stricter rules in 2022.

Hong Kong customs authorities have detained two men suspected of sending more than $ 380 million through personal bank accounts and a cryptocurrency trading platform. They are a 28-year-old woman and her 21-year-old brother. Authorities detained them in Yau Tong’s residential area following an anonymous intelligence report.

The aforementioned money laundering plot took place between May and November 2020, when the suspects opened several accounts at various banks in Hong Kong. One was an online bank account. The pair also opened accounts on an unidentified cryptocurrency exchange. Subsequently, they moved funds through cash deposits, wire transfers, and crypto transactions. Authorities say they were arrested for «dealing with property that is known or reasonably believed to represent the proceeds of an actionable crime.»

For the time being, the suspects have been released on bail, but investigations are ongoing and further arrests are likely. Under Hong Kong law, if both are found guilty, they can each be sentenced to 14 years in prison. An additional fine of $ 5 million may also be imposed.

Crypto and crime

With the increase in the uptake of cryptocurrencies, some activists have taken advantage of the sector ‘s lack of regulation to carry out criminal activities. These include money laundering, drug trafficking and terrorist financing. These are the reasons why some regulators, such as those in the US and India, seek stricter restrictions on cryptocurrencies and related companies.

In October 2020, two Hong Kong Bitcoin traders were sentenced to two years and 2.5 years in prison for money laundering. Authorities seized approximately € 2 million worth of Bitcoin assets, believed to be laundered cash. In June, more than 1,000 people in China were suspected of committing fraudulent activities on a telecommunications network. They were detained by Chinese authorities for this and crypto-asset money laundering charges. Illegal activities also came through pump and dump schemes.

Authorities continue to persecute these criminals and others. For example, the Swiss Financial Markets Supervisory Authority (FINMA) spoke in September about its plans to implement anti-money laundering (AML) directives on cryptocurrency providers.

Binance exchange has been repeatedly accused of being one of the cryptocurrency providers that facilitates crime. However, recently the company has found it difficult to change this. From obtaining a license to operating in the UK and hiring experienced AML officers to partnering with regulators. Various analysts agree that there is more to see in terms of regulation in 2022, warning defaulters about upcoming limits and possible terminations.

Jean Simmons

Jean Simmons has been a cryptocurrency enthusiast since 2014 and has been dedicated to the topic on a daily basis since she first learned about Bitcoin and blockchain technology. Besides cryptocurrency, Jean studied computer science and worked for two years at a blockchain startup. At Mercayala, he is responsible for technical issues. His goal is to bring cryptocurrencies to the world in a simple and understandable way.

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