Recently, Hong Kong has exposed a significant money laundering case worth USD 146.5 million that involved both stablecoins and fiat currencies.

Arrests and Investigations

As part of this operation, two individuals have been arrested—one local and one non-resident in Hong Kong. The investigation indicated that these individuals had transferred substantial amounts of cash out of the region using rapid and frequent transactions with stablecoins and fiat currencies, which were traced back to an unsuspicious source.

Legal Framework Under OSCO

According to the Organized Crimes and Soliciting Offences Ordinance (OSCO), handling property that one knows or has reasonable grounds to believe represents proceeds of an indictable offence is illegal. This highlights the stringent measures in place to combat financial crimes.

Hong Kong’s Financial Crime Cases

In July 2025, Hong Kong authorities arrested 12 individuals connected to a cross-border criminal syndicate involved in crypto money laundering. The group allegedly used over 550 bank accounts and more than 560 ATM cards registered under their names or the names of unidentified persons. A total of USD 1.28 million was linked to known fraud cases, while another USD 5.52 million came from various victims.

Evolving Regulatory Landscape

The increasing number of financial crime cases and the rise in money laundering charges indicate the need for stronger measures. In 2024, a total of 44.480 financial crime cases were recorded, marking a 12% increase from the previous year. Furthermore, the number of people charged with money laundering rose by 230%, signaling a growing threat that regulatory bodies must address proactively.

Implementation of Stablecoin Ordinance

In response to these challenges, Hong Kong plans to implement the Stablecoin Ordinance in August 2025, establishing a licensing framework for fiat-backed stablecoin issuers. This law will set specific legal obligations for issuers, distributors, and custodians involved in fiat stablecoins. These obligations include licensing requirements, reserve management, redemption processes, compliance with anti-money laundering (AML) and counter-terrorist financing (CFT) regulations, and investor disclosure standards. The ordinance also includes advertising restrictions to prevent the promotion of unlicensed stablecoins, especially targeting retail investors during a six-month transition period.