The Hong Kong authorities are acquiring expertise in the management of crypto-related criminal activities.
According to reports, Hong Kong authorities are acquiring expertise in the management of cryptocurrency-related offenses. Authorities in Hong Kong successfully prevented an abduction attempt in which the abductors snatched a boy from the Tseung Kwan O Plaza retail center and demanded a 660,000 USDT ransom, according to a recent report.
Louis Li Sze-Chung, a renowned crypto investor and adviser to the local tech start-up association 852Web3, commented on the recent incident, stating that USDT stablecoin is traceable. Li clarified that the entities that issue USDT convert U.S. dollars of equal value and store them in custody as bases throughout the stablecoin’s existence.
In the meantime, Li observed that the authorities could request that a stablecoin issuing company suspend or eliminate coins stored in purses in the event of a crime. These cases are comparable to one that occurred in November of last year, when the U.S. Secret Service identified a human trafficking syndicate that operated pig-butchering farms in Southeast Asia. Tether halted the transfer of USDT worth $225 million that was associated with the syndicate.
Joshua Chu Kiu-wah, a counsel who specializes in cybersecurity and technology disputes, emphasized the effectiveness of withholding funds in stablecoins. Chu posits that authorities could block such funds within a day, in contrast to traditional institutions, where the procedure may take months and necessitate a court order unless there are exceptional circumstances.
Li and Chu verified the convenience and potential of identifying suspicious stablecoin holders whenever they wish to convert their holdings into currency. Li believes that such processes would likely involve centralized organizations, such as banks, exchanges, or money intermediaries. Consequently, law enforcement agencies may attempt to obtain the cooperation of these entities by informing them of the suspected accounts.
While Hong Kong’s authorities acknowledge that they are making progress in the fight against crypto-related crimes, those that involve decentralized cryptocurrencies such as Bitcoin and Ethereum are still beyond their reach. These crypto-assets are difficult to trace to specific proprietors and do not involve intermediaries. Decentralized exchanges (DEXs) do not cooperate with agencies to disclose users due to their status, which is why transactions executed through them are untraceable.
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