- Hong Kong authorities are gaining experience in handling crypto-related crimes.
- Authorities thwarted an attempt to kidnap a boy from a plaza in Hong Kong.
- Stablecoins can be frozen in one day, unlike traditional banks, which take longer.
Hong Kong authorities are reportedly gaining experience in handling crimes involving cryptocurrencies. According to a recent report, authorities in Hong Kong thwarted a kidnapping attempt where the kidnappers demanded a 660,000 USDT ransom after kidnapping a boy from the Tseung Kwan O Plaza shopping center.
Commenting on the recent event, renowned crypto investor Louis Li Sze-Chung, an adviser to local tech start-up association 852Web3, noted that USDT stablecoin is traceable. Li explained that companies issuing USDT convert U.S. dollars of equal amounts, storing them in custody as pegs throughout the stablecoin’s existence.
Meanwhile, Li noted that in the event of a crime, the authorities could ask a stablecoin issuing company to freeze or destroy coins held in wallets. Such cases are similar to a case from last November when the U.S. Secret Service spotted a human trafficking syndicate running pig-butchering farms linked to Southeast Asia. Tether froze $225 million worth of USDT linked to the syndicate.
Joshua Chu Kiu-wah, a lawyer specializing in technology disputes and cybersecurity, highlighted the efficiency of freezing funds in stablecoins. According to Chu, authorities could freeze such funds within one day, unlike traditional banks, where it could take months, considering the process requires a court order unless under unique circumstances.
Li and Chu confirmed the ease and possibility of identifying suspicious stablecoin holders whenever they want to convert their holdings into cash. Li thinks such processes would likely involve centralized organizations like exchanges, banks, or money changers. Hence, law enforcement agencies can seek the corporation of such entities by informing them of the suspected accounts.
Although authorities in Hong Kong acknowledge gaining ground in tackling crypto-related crimes, those involving decentralized cryptocurrencies like Bitcoin and Ethereum remain out of reach. Such crypto-assets do not involve intermediaries and can hardly be traced to specific owners. Similarly, transactions executed using decentralized exchanges (DEXs) remain untraceable, considering the DEXs would not cooperate with agencies to expose users because of their status.
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