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Hong Kong Cracks Down on ‘Stablecoins Craze’ – Two Arrested in $146.5M Money Laundering Scandal

Hong Kong Cracks Down on ‘Stablecoins Craze’ – Two Arrested in $146.5M Money Laundering Scandal

Published:
2025-07-24 10:45:24
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Hong Kong regulators just dropped the hammer on stablecoin chaos—and it’s about time. Two suspects are in cuffs after a $146.5M laundering operation got smoked. Here’s the breakdown.

The ‘Stable’ Facade Cracks

Another day, another crypto scheme wrapped in buzzwords. This time? Stablecoins—the so-called ‘safe haven’ of crypto—turned into a $146.5M slush fund. Hong Kong’s Financial Services Authority (FSA) isn’t buying the hype.

How It Went Down

Authorities traced dirty money funneled through ‘pegged’ tokens—because nothing says ‘financial innovation’ like old-school laundering with extra steps. Two arrests so far, but the FSA’s net is widening.

Regulators Draw the Line

Hong Kong’s warning shot to the crypto sector: play fast and loose with stablecoins, and you’ll meet the same fate. Meanwhile, TradFi bankers sip champagne, whispering ‘we told you so.’

One question lingers—when will the industry learn that ‘stable’ doesn’t mean ‘above the law’?

Hong Kong Customs Officers Arrest Two For Laundering $146.5 Million

According to a South China Morning Post published on 24 July 2025, Hong Kong custom officers arrested two men for smuggling cash, making suspicious transactions, apparently including with Tether stablecoin USDT.

“A Customs and Excise Department spokesman said that an investigation into the pair found they had smuggled cash out of the city,” the news report stated. “An insider said the suspects also made transactions using the stablecoin USDT and regular currency, with officers finding the source of funds to be questionable.”

Tether once again in the spotlight for money laundering. Will this be the new normal?

2 arrested in Hong Kong over laundering HK$1.15 billion in case involving stablecoin

Men accused of using transactions and cash-smuggling operations to launder funds #fintech #tech… pic.twitter.com/erDbplkyQ2

— Richard Turrin (@richardturrin) July 23, 2025

: The 12+ Hottest crypto Presales to Buy Right Now

Financial Secretary Confirms Stablecoin Licenses To Roll Out Starting August

To become world’s first regulated regime for stablecoins, Kong Kong said that it will implementing the stablecoin ordinance in August 2025. The MOVE came after Hong Kong’s Legislative Council passage. It mandates entities or individuals issuing a fiat-referenced stablecoin (FRS) or Hong Kong Dollar-pegged tokens within the administration to obtain licenses from the HKMA.

Only licensed institutions can offer FRS, enabling retail investors to access stablecoins. The legislation states that these rules aim to protect the public and the investors. Additionally, to minimise fraudulent behaviour, the ordinance only allows ads for licensed FRS issuers.

In case you were wondering why stablecoin legislation was rushed through tonight…

Starting August 1, 2025, Hong Kong🇭🇰will launch an offshore Renminbi (RMB) stablecoin program, that aims to enhance RMB use in international trade and also establish Hong Kong as a digital… https://t.co/T5MX4pQlJ8 pic.twitter.com/DUew8iCUcf

— Subjective Views (@subjectiveviews) July 18, 2025

: 20+ Next Crypto to Explode in 2025

Key Takeaways

  • The concerns around stabelcoins emerged just days before implementations of Hong Kong’s stablecoin ordinance.  

  • Hong Kong custom officers arrested two men for smuggling cash, making suspicious transactions, including with Tether stablecoin.

|Square

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