TLDR

Hong Kong Customs is building a crypto tracking tool with HKU to combat over HK$9B in virtual asset-linked laundering.
The tool will trace crypto flows across wallets and exchanges to detect suspicious cross-border transactions.
Seven cases since 2021 involved over HK$9B disguised as commercial activity using crypto platforms.
A major case saw 1,000 suspicious transactions worth HK$1.8B, leading to three arrests.
Customs is expanding regional training with eight countries to boost anti-money laundering cooperation in Asia.

Hong Kong Customs is developing a crypto transaction tracking tool with the University of Hong Kong to fight money laundering. The collaboration aims to monitor digital asset misuse and identify suspicious trading patterns linked to criminal proceeds. Authorities are responding to a rise in virtual asset-related laundering cases totalling over HK$9 billion since 2021.

New Crypto Tool Targets Cross-Border Financial Crimes

Customs and university experts are working to build a system that can trace cryptocurrency transactions across digital wallets and exchanges. The tool will enhance forensic capabilities and improve case-building for court evidence requirements. Moreover, the project comes as virtual asset crimes grow more complex and harder to detect.

The department has already used university-developed forensic tools in copyright enforcement, which will now extend into financial investigations. Hong Kong Customs will expand cooperation with financial institutions and other enforcement agencies across Asia. Their goal is to develop a unified strategy to combat borderless digital crimes.

Officials emphasized that conventional monitoring is no longer enough, as cryptocurrencies enable rapid and anonymous fund transfers. The new tool is expected to uncover patterns within blockchain records that indicate laundering. However, its operational details remain confidential due to security concerns.

Cases Reveal HK$9 Billion in Crypto-Linked Laundering

Authorities confirmed that seven out of 39 money laundering cases between 2021 and May 2025 involved cryptocurrencies. These specific cases accounted for more than HK$9 billion (US$1.1 billion) in illicit fund movements. Most suspects disguised the transactions as routine commercial activity to avoid detection.

One major case involved 1,000 suspicious transactions totaling HK$1.8 billion across five companies and 18 bank accounts. Investigators arrested three suspects, two of whom were linked to HK$760 million in transactions on a crypto platform. Authorities believe these cases highlight the urgent need for better digital oversight.

While traditional surveillance tools focus on banks and remittance firms, crypto laundering bypasses these systems using decentralized networks. Hence, Hong Kong Customs seeks stronger capabilities to trace digital trails across exchanges and wallets. The new tracking tool aims to close these enforcement gaps.

Training and Regional Support Expand Investigation Capacity

To build regional collaboration, Customs hosted a three-day workshop with law enforcement from eight countries, including India and Singapore. The training focused on trends in crypto laundering and how agencies can adapt to digital threats. This follows a December 2024 memorandum to strengthen joint anti-money laundering efforts.

Participants included officials from China, Thailand, Iran, and New Zealand, showing a regional push toward digital asset oversight. The University of Hong Kong provided technical guidance on tracking techniques and digital forensics. As a result, participants gained insights into monitoring large-scale digital asset transactions.

Customs also confirmed continued investment in training and capacity-building for local and international officers. They aim to standardize enforcement tactics and encourage knowledge sharing across jurisdictions. These steps reflect Hong Kong’s intent to lead efforts against virtual asset-based financial crime in Asia.

 

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Filed under: News - @ June 12, 2025 3:25 pm