Another virtual currency exchange shop in Hong Kong has been blocked by the police. It is suspected of being involved in money laundering. Be cautious when choosing OTC shops!

Today, a virtual currency exchange shop called Long Teng in Hong Kong was blocked by the police. The shop was suspected of being involved in money laundering and running away.

According to netizens, the store had previously carried out a large number of advertisements on the Chinese social software Xiaohongshu, aiming to attract a large number of mainland tourists to come for virtual currency exchange.

This is not the first time that Hong Kong’s virtual currency exchange shops have run away. Since Hong Kong has vigorously promoted the development of the Web 3.0 ecosystem, the virtual currency derivative service industry has also developed accordingly. However, industry chaos has always existed. While the government encourages development, many people will go beyond the legal red line and take high risks to take advantage of the opportunity to profit from it.

Hong Kong virtual currency exchange shops frequently run away

It is not uncommon for virtual currency exchange shops to run away in Hong Kong. In May this year, a 26-year-old woman named Zheng reported to the police in Chungking Mansions shopping mall in Tsim Sha Tsui, saying that she, her colleagues and three other people entered a store in the mall to trade virtual currencies.

After she transferred 1.5 million yuan worth of Tether (USDT) to the merchant, the merchant did not pay her. Instead, she and her colleagues were locked in the store and fled.
Earlier in March, a virtual currency exchange shop called Danniubi was accused of killing regular customers, involving tens of millions of dollars.
According to reports, there was a back door in the Daniu Coin store. Customers who entered the store were locked in the front half of the store, while the back door was already prepared. At that time, there were more than a dozen regular customers gathered in the store, each holding an average of more than 1 million yuan in exchange for USDT.

One of the victims was the owner of another currency exchange shop. He claimed that he had been cooperating with the owner of the Daniu Coin shop for several months without any problems, so he relaxed his vigilance.
The boss allegedly claimed to have a cigarette after collecting the cash and fled quickly, with the glass door making the pursuit impossible.

The prevalence of virtual currency exchange shops in Hong Kong is in a regulatory gray area

The new "leeks" in the Hong Kong currency circle still exist, partly because of the convenient way to purchase virtual currency in Hong Kong, that is, the virtual currency exchange shops, or OTC shops, that can be seen everywhere on the streets.
This kind of store is very convenient for newcomers who want to try the currency circle.

Users only need to walk into the store and quickly purchase virtual currencies, especially the stable currency USDT, through cash or transfer, without the need to trade with strangers online.
In fact, OTC is a virtual currency buying and selling market for the retail public. During the epidemic, the expansion of such exchange shops in Hong Kong was very crazy.
These OTC stores are also one of the customer acquisition channels for Hong Kong currency trading platforms such as JPEX. In the past, some OTC shops used the gimmick of buying and selling Bitcoin at a discount to attract customers.

Hong Kong police crack down on money laundering

The Hong Kong police have strengthened their anti-money laundering efforts and detected many money laundering cases.

According to public report statistics, nearly 10 money laundering cases involving more than 13 billion Hong Kong dollars were detected in 2023, most of which were conducted through virtual currencies.
Cryptocurrency has the characteristics of relative anonymity, high liquidity and decentralization, and can easily become a tool for money laundering.
Criminals will transfer the stolen money to the seller's account through OTC transactions on the platform or private transactions, etc.

After receiving it, they will convert it into legal currency through OTC transactions, underground banks, private transactions, etc. Some criminals will also use currency mixing. Using a device to mix coins has greatly increased the difficulty for the police to solve the case.
This year, the Yau Tsim Police District conducted an anti-fraud and anti-money laundering operation codenamed Spyker from June 11 to 18 to combat fraud and money laundering cases in the district.

The police used "obtaining property by deception", "theft" and " 34 men and 5 women were arrested for "money laundering" and other crimes, ranging in age from 17 to 63 years old.

The arrested persons were reported as salespersons, decoration workers, truck drivers and unemployed.
Most of the arrested persons were puppet account holders who were recruited by a fraud syndicate and offered thousands of dollars in compensation to induce them to sell their accounts and collect the fraudulent money. Most of those arrested were released on bail pending further investigation.
In this operation, the police detected a total of 36 fraud cases, including 8 online shopping fraud cases, 8 online job seeking fraud cases, 6 telephone fraud cases, 4 online investment fraud cases and 10 other types of fraud cases.

The victims ranged in age from 18 to 71, and the total amount of money involved in the fraud was as high as NT$71 million.

Choose virtual currency exchange shops carefully

In anti-money laundering-related cases, many people have been arrested for assisting criminal money laundering without knowing it. Industry insiders remind you to be careful of getting shot.

Please protect your ID card, bank card and other private information, and be careful when exchanging legal currency. and virtual currencies, it is recommended to trade on local compliant virtual asset exchanges.