Hong Kong recently uncovered a significant USD 146.5 million money laundering scheme involving both stablecoins and fiat currency transactions.

Law Enforcement Actions

The authorities made arrests of two individuals—both local and non-local—who were suspected of facilitating the illicit transfer of substantial amounts of cash out of Hong Kong. The investigation further indicated that these transactions involved frequent exchanges between stablecoins and fiat currency, originating from a dubious funding source.

According to relevant laws, anyone found handling property believed to be proceeds from an indictable offence can face charges under the Organized Crimes and Triads Suppression Ordinance (OSCO).

Financial Crime Cases in Hong Kong

In July 2025, authorities apprehended 12 individuals associated with a cross-border criminal syndicate. This group reportedly used over 550 bank accounts and more than 560 ATM cards to move large sums of money. The police identified that USD 1.28 million was linked to known fraud cases, while another USD 5.52 million had been taken from various victims.

Emerging Threats and Regulatory Response

These incidents underscore the ongoing need for heightened vigilance in financial and cryptocurrency sectors. In 2024, a total of 44.480 cases of financial crime were reported, marking a 12% increase from the previous year. The number of individuals charged with money laundering also surged by 230%.

To address these challenges, Hong Kong plans to implement the Stablecoin Ordinance starting August 1, 2025. This regulation aims to establish a licensing framework for fiat-backed stablecoin issuers. It will impose specific legal obligations on issuers, distributors, and custodians involved in such currencies. These obligations include licensing requirements, reserve management, redemption processes, compliance with Anti-Money Laundering (AML) laws and Counter-Financing of Terrorism (CFT), and investor disclosure standards.

Moreover, the ordinance will impose restrictions on advertising to prevent the promotion of unlicensed stablecoins, particularly targeting retail investors, during a six-month transition period.