Money Laundering Ring Busted in Hong Kong Using Tether to Flush Millions Hong Kong authorities have detained four persons suspected of laundering $155 million through cryptocurrency wallets and bank accounts.
This was the city’s first incidence of virtual money being used to launder dirty money, according to the city’s customs agency.
Money Laundering Syndicate Recycles $155 Million in Crypto and Fiat Transactions Hong Kong Customs revealed Thursday that the criminal organisation is suspected to have processed unlawful cash totaling 1.2 billion Hong Kong dollars ($155 million).
Officers seized the accused ringleader and three other inhabitants of China’s special administrative area in an operation code-named “Coin Breaker.”
The money laundering gang began its illicit activities last year and has been operating through three different shell businesses.
To trade the stablecoin tether (USDT), the entities opened e-wallet accounts with an undisclosed digital asset platform.
Investigators believe the scheme’s mastermind persuaded the other participants to register as CEOs of the three companies.
“Our research indicated that between February 2020 and May 2021, the syndicate laundered about HK$880 million ($113 million) through cryptocurrencies,” said Senior Superintendent Mark Woo Wai-kwan of the Customs Syndicate Crimes Investigation Bureau.
According to the South China Morning Post, the currencies used in the transactions came from about 40 different e-wallet accounts.
According to Superintendent Grace Tang Wai-ngan, 150 million Hong Kong dollars worth of cryptocurrency was moved to over 20 e-wallets from the total amount.
The remaining $730 million HKD was cashed out and put into eight bank accounts controlled by the three shell corporations.
In just six months, almost 500 cryptocurrency transactions moved through the firm’s wallets, she explained.
The average transaction was 400,000 coins, or more than 3.1 million Hong Kong dollars (about $400,000), with the greatest transaction comprising $20 million in cryptocurrency.
Officials believe that in addition to the 880 million Hong Kong dollars handled through cryptocurrency, another 350 million Hong Kong dollars ($45 million) was laundered through traditional channels.
The cash were deposited into the same eight bank accounts via a total of 100 other accounts, including business accounts belonging to 18 different Hong Kong-based shell firms.
In the end, a total of 1.08 billion Hong Kong dollars (almost $140 million) was placed into over 200 bank accounts.
In Hong Kong and other jurisdictions, these included personal accounts as well as accounts managed by money changers, investment corporations, and real estate firms.
Investigators discovered that 60% of the cash were routed through bank accounts in Singapore, where Hong Kong authorities requested assistance in tracking down the funds.
To combat the use of cryptocurrency in money laundering offenses, Hong Kong Customs intends to strengthen its collaboration with other agencies and regulators.
The inquiry into the funds’ origins, initial senders, and ultimate receivers of the laundered funds is still ongoing.
The four suspects have been released on bond, according to the South China Morning Post.
Their money laundering charges might result in a 14-year prison sentence and a fine of $5 million Hong Kong dollars (about $640,000).
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