Hong Kong Police Crack Down on Extensive Triad Money Laundering Network

Hong Kong law enforcement has taken down a significant money laundering network linked to organized crime. The operation, controlled by the Triad, utilized cryptocurrency trades to launder the proceeds of more than 300 criminal activities. A total of 458 individuals have been arrested in connection with this operation.

The recent series of arrests, which lasted for seventeen days, resulted in the apprehension of 330 men and 128 women across the city. The suspects include individuals from mainland China, as well as Hong Kong residents and travelers from other locations.

Triad Money Laundering Operation Washed $64.5M in Criminal Earnings

During the operation, law enforcement conducted 400 separate raids, leading to the interception of over 16 million yuan ($2.2M). However, authorities suspect that the operation processed an astonishing 470 million yuan ($64.5M).

According to Senior Superintendent Lui Che-ho, many of the individuals arrested were exploited by organized crime syndicates into engaging in money laundering activities in exchange for monetary rewards. The criminals paid them varying amounts, ranging from hundreds to thousands of dollars, and required them to provide details of the bank accounts used in the illegal funds processing.

The syndicate employed a strategy that involved withdrawing the illicit funds from bank accounts and subsequently using the cash to purchase cryptocurrencies, effectively laundering the dirty money.

Hong Kong Takes on Money Laundering while Nurturing its Crypto Sector

The comments made by Senior Superintendent Lui Che-ho shed light on how money laundering rings frequently convert fiat currency into cryptocurrencies in order to obfuscate the trail of illicit funds.

While regulators worldwide have implemented stringent anti-money laundering (AML) regulations for crypto-related businesses, Hong Kong is also striving to cultivate its cryptocurrency sector. On occasion, these two objectives may seem contradictory.

For instance, Hong Kong’s AML regulations require banks to conduct due diligence checks on their customers. However, the territory’s financial regulator addressed a letter to lenders in June, stressing that due diligence procedures should not unreasonably burden crypto businesses.

This intervention placed pressure on financial institutions reluctant to serve crypto firms due to concerns surrounding AML compliance. Major banks, including Standard Chartered and HSBC, were recipients of the letter.

Of course, Hong Kong is not the only jurisdiction where AML rules pose challenges to crypto companies. A recent report revealed that two-thirds of surveyed businesses expressed worries about potentially violating AML regulations.