Hong Kong residents used cryptocurrencies to move funds

Hong Kong

The security crackdown in Hong Kong has triggered concerns among some residents about asset safety, and they seem have turned to crypto to move their funds.

This has been revealed in a report by the Canadian anti-money laundering agency, Fintrac.

According to the organization, record capital transfers came from the city in the past year, amounting to more than $34 billion. The outflows are the highest since 2012, when the earliest Fintrac records are available.

It is said to be the first evidence of a significant flight of capital overseas from the Asian financial hub following the security turmoil that resulted due to pro-democracy protests. This led to the Hong Kong police freezing accounts of several people linked to these demonstrations.

Overall, the city’s record capital transfers are up 46% from 2016, and 10% from 2019.

Darren Gibb, a spokesperson for Fintrac suggested that some of the fleeing Hong Kong residents could be using cryptocurrencies to move funds ashore:

“The Fintrac data captures only a fraction of total legal inflows into the Canadian economy because many transactions are not included, such as transfers via cryptocurrencies, between financial institutions, or under $8,000.”

In addition to the anti-money laundering agency, the report also quotes a Canadian bank executive who claims to have seen a remarkable increase in balances in existing accounts linked to Hong Kong phone numbers.

The Chinese government has a peculiar relationship with crypto.

Regulatory authorities conducted a massive clampdown on cryptocurrencies and ICOs towards the end of 2017 that restricted the possession of these digital assets, yet at the same time the country has allowed focus on blockchain and mining, though the latter is also now under the radar.

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