Hong Kong Police Bust Vast Triad Money Laundering Ring
Police in Hong Kong have arrested 458 people in relation to an extensive organized crime money laundering network. The sting reportedly brought down a Triad-controlled operation that used crypto trades to wash the proceeds of as many as 314 crimes.
According to local media reports on August 25, the recent string of arrests occurred over the course of seventeen days.
Triad Money Laundering Operation Washed $64.5M in Criminal Earnings
During this period, the Hong Kong Police arrested 330 men and 128 women in 400 separate raids across the city. The suspects included 423 Hongkongers and travelers from mainland China and elsewhere.
As part of the operation, law enforcement reportedly intercepted more than 16 million yuan ($2.2M). However, this pales compared to the 470 million yuan ($64.5M) it is suspected of processing.
In a statement reported by the South Shina Morning Post, Senior Superintendent Lui Che-ho said that many of the people arrested had been taken advantage of by organized crime syndicates.
“Criminal syndicates lured them into money-laundering activities with monetary rewards,” he said. “They were paid hundreds to thousands of dollars each, but had to hand over the details of the bank accounts used to process the illegal funds.”
Continuing, he said that the group laundered dirty money by withdrawing it from bank accounts. They then used the cash to purchase cryptocurrencies.
Hong Kong Battles Money Laundering While Fostering Its Crypto Sector
Lui Che-ho’s comments highlight the way such money laundering rings often swap fiat for crypto to help hide the trail of illicit funds.
Regulators around the world have imposed strict anti-money laundering (AML) rules on businesses that deal with crypto. But Hong Kong is also attempting to cultivate its crypto sector. And at times, the two objectives can seem at odds.
For example, Hong Kong’s AML regulations require banks to carry out so-called due diligence checks on their customers.
But in June, the territory’s financial regulator sent a letter to lenders emphasizing that due diligence procedures shouldn’t place an “undue burden” on crypto businesses.
The intervention applied pressure to lenders that are reluctant to take on crypto firms as clients over AML concerns. Major banks including Standard Chartered and HSBC, were among the letter’s recipients.
Of course, Hong Kong isn’t the only place where AML rules present a challenge to companies that deal with cryptocurrency. One recent report found that two-thirds of all businesses surveyed expressed concerns about the possibility of violating AML regulations.
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