Over $ 380 million laundered through Hong Kong crypto exchange, 2 people arrested

China and Hong Kong may be geographically close, but the way the two regulators regulate cryptocurrencies are completely different. Nevertheless, neither of the two with this emerging asset class can escape money laundering.

Money laundering through Hong Kong stock exchanges

On December 28, the government of the Hong Kong Special Administrative Region notification 2 people were arrested for laundering approximately $ 384 million. The subjects, identified as brothers and both in their twenties, used bank accounts and exchanges to move various assets, including cryptocurrencies. The notice did not specify which exchange.

“According to the results of the investigation, the two arrested persons opened several personal accounts with various banks in Hong Kong (including virtual banks) and a cryptocurrency exchange between May and November last year in order to participate in money laundering cases for money transactions of unknown origin through bank transfers, cash deposits and cryptocurrencies”.

While China has imposed a strict ban and threatened further action against violations, Hong Kong appears to continue to revise and add regulations on cryptocurrencies. In contrast to the most populous country in the world, the Special Administrative Region does not restrict digital currencies.

However, despite the promised regulations, it is likely that China’s stance on cryptocurrencies will affect Hong Kong’s position as well. On the flip side, Hong Kong is also exploring options for a potential CBDC (central bank digital currency). Hong Kong Monetary Authority (HKMA) released White paper (White paper) engineering.

In addition, the authorities made sure that users traveling between China and Hong Kong can use the e-CNY. It now remains to be seen how the fintech upgrade will affect Hong Kong’s crypto regulation.

China’s CBDC cannot stop money laundering

It is wrong to believe that CBDCs can prevent money laundering.

Around the beginning of November, Chinese media reported the first alleged money laundering incident related to the digital yuan. Xin Mi Public Security Division and Zhengzhou Public Security Bureau’s Anti-Fraud Center arrested 11 people for participating in an e-wallet telecommunications fraud.

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