Hong Kong authorities gaining experience in disrupting illicit crypto activities: experts

Post speaks to cryptocurrency experts after kidnapping involving demand for Tether stablecoin in exchange for boy’s return

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Hong Kong authorities have amassed experience in tracing criminal activities involving cryptocurrencies, with a speedy response being key, experts say. Photo: Getty Images

Published: 12:00pm, 14 Jul 2024Updated: 4:16pm, 14 Jul 2024

The perceived anonymity offered by cryptocurrency platforms has made some criminals eager to use them for illegal activities, but experts in Hong Kong have said law enforcement still has the ability to trace and disrupt virtual asset transactions.

The Post reached out to three cryptocurrency experts after a recent case in the city in which two kidnappers demand a ransom to be paid in Tether, a stablecoin pegged to the US dollar, to ensure the safe return of a three-year-old boy.

A Post search also found some underground football betting platforms claiming to accept Tether tokens. The Jockey Club is the only licensed betting operator in Hong Kong.

The experts said the city had accumulated law enforcement experience when it came to cryptocurrencies, to a point where authorities could easily trace money-laundering activities that used such virtual assets.

Joshua Chu Kiu-wah, a lawyer specialising in technology disputes and cybersecurity, said the focus should be less on new laws and regulations since the virtual assets were already covered, and the key was “more about knowing how to apply existing rules”.

Veteran cryptocurrency investor Louis Li Sze-chung, who is also an adviser to local tech start-up association 852Web3, addressed the demand for a ransom in cryptocurrency during the thwarted kidnapping earlier this month.