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Hong Kong Arrests 4 in Alleged $155M Crypto Money-Laundering Scheme: Report

Customs authorities say the alleged money laundering syndicate charged criminal clients a commission of 3% to 5%.

  • Hong Kong authorities arrested four men suspected of involvement in a money-laundering syndicate that involved HK$1.2 billion (US$155 million), the South China Morning Post reported on Thursday.
  • The men, ages 24 to 36, were arrested last week during operation "Coin Breaker," the newspaper cited a Hong Kong customs official as saying.
  • It is alleged the syndicate operated from February 2020 to May this year, with shell companies using e-wallet accounts and a local platform to trade in "privacy coins" issued by Tether Ltd.
  • Customs authorities say the alleged money-laundering syndicate charged criminal clients a commission of 3% to 5%.
  • Stuart Hoegner, general counsel for Tether, told CoinDesk via Telegram on Thursday his company did not issue so-called "privacy coins."
  • It is the first money-laundering case involving cryptocurrency detected by the city's customs authorities, according to the report.
  • Money laundering in Hong Kong carries a maximum penalty of 14 years in prison and a fine of up to HK$5 million (US$643,000).

Read more: UK Police Seize $250M Worth of Crypto

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UPDATE (July 15, 2021, 6:15 UTC): Adds comments from Stuart Hoegner.

Greg Ahlstrand

Originally from California, I've been Asia-based since 1999, headquartered in Hong Kong and Jakarta and traveling throughout the Asean countries, Japan, Korea, the Chinese mainland and Taiwan for stories. Made Australia a couple of times, too. I started my journalism career as a news assistant at the Fresno Bee in Central California while studying the subject in school after the Navy. I went from launching and recovering helicopters on flight decks at sea to recovering papers fresh off the printer in the Bee's basement and launching them onto the editors' desks, whose editors had long since gone home for the night. Eventually, they let me stop delivering the paper and start writing stuff in it. My first beat was night cops: liquor store robberies, gang shootings, fatal car crashes (almost always alcohol related). It was an education. I am, as implied above, a U.S. Navy veteran. I served in seagoing helicopter squadrons as an aviation anti-submarine warfare technician throughout the Asia Pacific region and the Indian Ocean. I have a significant number of sailor stories to tell. I have no significant crypto holdings. Among my hobbies are welding, building stuff, home remodelling, (or knocking a house down and starting from scratch if it's too far gone to fix), riding horses and rebuilding old tractors. So far I've done a Ford 8N and a Ford 9N. It's slow going, because I live in Hong Kong and the tractors are in California, so I only get to work on them once or twice a year, for a week or two at a time - and that was before covid. I love my Lab, Cooper, whom my neighbors asked me to adopt two years ago when they moved back to Shanghai from Hong Kong. Cooper and I actually planned the whole thing -- we've known each other almost his whole life -- but his first parents are unaware of the conspiracy; and they send him Christmas presents every year.

Greg Ahlstrand