12 Arrested in Hong Kong as Police Shut Down Crypto Money Laundering Network with Over 500 Bank Accounts

How Did Hong Kong’s Money Laundering Network Use Crypto and Fake Accounts

A major money laundering operation in Hong Kong has been shut down following the arrest of 12 people connected to a scheme involving cryptocurrency and over 500 fraudulent bank accounts.

The group is suspected of laundering HK$118 million (approximately $15 million) using a network that spanned both Hong Kong and mainland China.

The Commercial Crime Bureau of the Hong Kong Police Force has successfully cracked down on a cross-border criminal organisation active in Hong Kong and China, targeting their money laundering operations.

What Was the Scheme and How Did It Work

The syndicate reportedly recruited individuals to open bank accounts which were then used to receive funds from various fraud cases.

These accounts acted as funnels to withdraw cash, which was later exchanged for cryptocurrency at local crypto exchange shops.

Huge amounts of cash seized during the operation.

This process helped mask the origin of the illicit money.

Authorities traced the operation to a rented residential flat in Mong Kok, which served as the base for organising their activities.

Police surveillance captured two suspects on 15 May leaving the Mong Kok location — one visiting a bank and the other using an ATM — before both converted the cash into crypto in Tsim Sha Tsui.

Letter of Authorisation for Virtual Currency Account Opening

They were arrested on the spot with HK$770,000 ($98,540) in cash seized.

Visual breakdown of how the “Nightstrike” money laundering operation was carried out (translated image)

Who Were Arrested and What Was Seized

Police detained nine men and three women aged between 20 and 41, including two core organisers and ten recruits, many of whom were unemployed.

Besides cash, law enforcement confiscated over 560 ATM cards, multiple mobile phones, and various documents related to banking and crypto transactions.

ATM cards being seized.

Senior Inspector Tse Ka-lun from the Commercial Crime Bureau explained that “the individuals often used bank accounts from their friends and family to launder the stolen funds.”

The illicit cash flow largely relied on these “stooge” accounts, which accounted for about 73% of fraud-related arrests in Hong Kong this year.

How Serious Is Fraud in Hong Kong

Fraud cases have been on the rise, with a 12% increase in reports compared to last year.

Hong Kong police have arrested over 10,000 people linked to fraud in 2024, revealing the scale of financial crime in the city.

Of those arrested, many were involved in using fake or third-party bank accounts to move illicit money.

Superintendent Kwok Ching-yee noted,

“In just 2024, almost 95,000 crimes were reported, with nearly half linked to fraud.”

The crackdown on this syndicate is part of broader efforts to stem financial crimes that threaten Hong Kong’s reputation as a global financial centre.

What Are the Legal Risks for Using Fake Accounts

Senior Inspector Tse Ka-lun warned the public about the dangers of handing over bank accounts, even to trusted people.

“Dealing with money from criminal activities is regarded as a serious crime in Hong Kong.”

Offenders may face up to 14 years in prison and fines reaching HK$5 million under the Organised and Serious Crimes Ordinance.

How Is Hong Kong Balancing Crypto Growth and Crime Prevention

The police emphasised continuing cooperation with banks and international partners to combat money laundering at its roots.

This comes as Hong Kong’s Securities and Futures Commission has been tightening rules on crypto exchanges and introducing measures to improve market access and compliance.

Authorities are pursuing a dual strategy — supporting crypto innovation while clamping down on financial misconduct involving digital assets.