Hong Kong to develop crypto tracking tool for money laundering

Hong Kong Customs and Excise Department is collaborating with the University of Hong Kong (HKU) to develop a digital tool aimed at tracking cryptocurrency transactions involved in suspected money laundering schemes. This initiative responds to a rise in crypto-related money laundering cases, with authorities having recorded seven significant cases involving over HK$9 billion (approximately US$1.1 billion) in illicit virtual asset transactions since 2021.

The new tool is designed to trace cryptocurrency flows across wallets and exchanges to detect suspicious cross-border transactions, helping law enforcement identify patterns indicative of money laundering and other illicit financial activities. It builds on forensic technologies previously used by Customs in other areas, such as online copyright enforcement, and aims to enhance case-building capabilities for legal proceedings.

Hong Kong Customs Assistant Commissioner Mario Wong Ho-yin emphasized the transnational and borderless nature of these financial crimes, highlighting the need for expanded collaboration with academia, financial institutions, virtual asset industry players, and law enforcement agencies regionally and internationally. The department recently hosted a workshop involving officials from eight jurisdictions to strengthen cross-border cooperation against digital financial crimes.

Among the notable cases was one involving over 1,000 suspicious transactions worth HK$1.8 billion (about $229 million), spanning multiple companies and bank accounts, which led to arrests and revealed the use of crypto platforms to move large sums of illicit funds.

This development reflects Hong Kong's commitment to enhancing oversight and enforcement in the digital asset space amid growing global concerns about crypto-enabled money laundering and financial crimes. The exact operational details of the tracking tool remain confidential due to security reasons.

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