Hong Kong Crypto Assets Industry Faces Money Laundering Risks: Southeast Asian Fraud Industry Infiltration and Regulatory Response

As an international financial center, Hong Kong's Crypto Assets economy is thriving with the support of official policies. However, the anonymity and cross-border characteristics of virtual assets also facilitate illegal activities, leading to a large influx of involved Crypto Assets into the Hong Kong market, which poses compliance risks for industry participants.

Recently, a case involving mainland university students has attracted attention. The student helped someone in Hong Kong purchase USDT, but unknowingly became a tool for Money Laundering. In fact, this is a typical "card back to U" style Money Laundering case, closely related to Southeast Asian crime networks.

Through on-chain analysis, it was found that this case is just the tip of the iceberg. A highly industrialized Money Laundering gang is utilizing the Hong Kong over-the-counter trading service provider (VAOTC) to clean USDT funds. In less than three months, a single Money Laundering fleet illegally cleaned over $310,000, with the actual scale potentially being larger.

Currently, the regulation of the virtual asset OTC trading industry in Hong Kong is not yet完善. Many platforms have become Money Laundering channels due to a lack of effective compliance mechanisms. The Hong Kong Financial Services and the Treasury Bureau is promoting the VAOTC licensing system and the construction of an anti-Money Laundering regulatory framework, but the specific implementation details and effective date have not yet been announced.

In the face of the upcoming regulatory policies, VAOTC operators need to:

1. Improve customer due diligence ( KYC ) processes and anti-money laundering ( AML ) mechanisms.
2. Proactively understand and comply with regulatory requirements
3. Establish an internal risk control system
4. Strengthen communication with regulatory agencies
5. Use technical means to strengthen transaction monitoring
6. Strictly refuse funds related to organized crime and gray industry.

Hong Kong's new policy will promote the standardized development of the virtual asset over-the-counter trading industry. Operators should actively adapt to regulatory changes and enhance their compliance levels to achieve long-term stable development.