Hong Kong Races to Stop Lightning-Fast Money Flows Fueling New Laundering Schemes

Suspicious fund actions are prompting Hong Kong regulators to step up strain on licensed corporations, as criminals more and more flip to brokers and digital asset platforms to launder cash.

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A wave of high-speed transfers made by Hong Kong’s licensed monetary corporations has created new urgency amongst regulators, who now warn that criminals are more and more exploiting each stockbrokers and digital asset platforms to masks the origins of illicit funds.

The Securities and Futures Fee (SFC) has issued a round urging licensed corporations to stay alert to patterns that recommend layering – the stage of cash laundering wherein criminals try to obscure the origins of funds by passing cash by a number of accounts.

SFC marks quick deposits and withdrawals

The regulator famous a rising development of deception and rip-off proceeds touchdown in prospects’ accounts by a collection of tightly timed deposits, usually structured to keep away from detection, earlier than being withdrawn virtually instantly as money or digital property. The SFC says such habits signifies makes an attempt to hide each the supply and vacation spot of prison proceeds.

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The round reiterates the SFC’s expectations relating to inside controls. Corporations ought to monitor uncommon actions, consider whether or not programs can detect fast transaction cycles, and be sure that senior administration stays accountable for stopping abuse.

“Vigilance is essential to detecting layering actions, which might have been prevented by efficient and strong AML/CFT controls,” mentioned Dr Yip.

“Licensed corporations ought to stay alert to the warning indicators of suspicious transactions whereas usually assessing the robustness and effectiveness of their inside controls.”

The SFC has stepped up cooperation with the Hong Kong Police, together with the Anti-Deception Coordination Heart and the Joint Monetary Intelligence Unit.

Since September 2025, a number of licensed firms have joined the police’s 24/7 cease cost mechanism, which accelerates efforts to freeze suspect funds earlier than they disappear.

This collaboration has already yielded outcomes: up to now two months, roughly a 3rd of recognized fraud proceeds tried to cross by licensed companies had been intercepted.

Business knowledgeable about market dangers

To strengthen expectations, the SFC held a webinar offering updates on supervisory findings and rising AML/CFT dangers within the securities and digital asset markets.

The regulator plans to proceed to observe firms carefully and has warned that it’ll take enforcement motion if controls fall brief. The SFC says it would proceed to observe compliance and can intervene if firms fail to fulfill their obligations.

The newest name displays considerations that Hong Kong’s function as a monetary heart is making it a goal for complicated cash laundering schemes and that firms should do extra to keep away from being a part of it.