Hong Kong customs officials have detained three individuals for their involvement in a money-laundering scheme valued at HK$1.8 billion, linked to a crypto platform and bank accounts owned by fictitious companies.
Hong Kong’s billion-dollar case
According to a report, these accounts experienced unusually frequent and large-scale transactions despite the absence of tax filings, trade declarations, or legitimate business addresses for the companies. One particular account saw daily inflows of up to HK$39 million and conducted as many as 167 transactions in a single day.
Two of these individuals were reportedly involved in managing HK$760 million, which represents 40% of the total funds implicated in this case, through a cryptocurrency platform. The cryptocurrency in question was identified as Tether. Florence Yeung Yee-tak, who leads the financial investigation division of customs, commented on Thursday: “Investigating money laundering involving cryptocurrency presented us with challenges as it possesses a high degree of anonymity and is not restricted by jurisdictions.”
Authorities conducted a raid on Wednesday that targeted four residential properties, five business entities, and two entities licensed to operate money services, leading to several arrests.
How HK$1.8 Billion was laundered through crypto and shell companies
The three locals arrested – a woman, 42, and two men, aged 48 and 60 – allegedly set up five companies and 18 local bank accounts between June 2021 and July 2022 that handled more than 1,000 suspicious transactions involving funds from unknown sources.
Customs authorities reported that the three individuals apprehended were not acquainted with one another. An unemployed female suspect is believed to have played a significant role early in the money laundering chain, receiving money from various businesses and platforms dealing with cryptocurrency.
This money was then moved to different businesses or to the two male suspects via two authorized currency exchange businesses. According to the Customs and Excise Department, the woman was involved in transactions amounting to approximately HK$900 million.
The department further explained that the two men were involved in less significant roles; a 60-year-old driver was linked to HK$300 million, while the other, a self-employed individual, was associated with HK$600 million. Customs investigations discovered that the origin of the funds included a platform for cryptocurrency exchange and over 200 companies globally. These funds were quickly rerouted to other corporations upon their deposit into the accounts of shell companies.
