Hong Kong’s Cyber Security and Technology Crime Bureau (CSTCB) unveiled its new cryptocurrency tracing tool, CryptoTrace, on Wednesday, marking a major step in the city’s efforts to combat the growing threat of digital asset-related crime.
Developed in partnership with the University of Hong Kong and first introduced at the Blockchain Security Summit 2025, CryptoTrace is built to provide “advanced intelligence and investigative support” to officers handling virtual asset cases, according to the CSTCB. In late March, the bureau held dedicated training sessions to support its rollout and improve frontline officers’ capabilities in investigating crypto-linked offences.
The CSTCB emphasized its commitment to broader ecosystem resilience in parallel with its enforcement efforts. The bureau is actively working with stakeholders across the Web3 sector to “co-build a safer and more sustainable ecosystem,” though specifics on these collaborations remain limited.
According to the University of Hong Kong, CryptoTrace incorporates “cutting-edge blockchain analytics, graph, and visualization technologies” to help law enforcement trace laundered funds, identify suspicious activity, and accelerate investigations into cryptocurrency scams. The tool is expected to streamline complex digital asset investigations significantly.
This initiative comes at a critical time, as Hong Kong faces a surge in crypto-related crime. In October 2024, police arrested 27 individuals connected to a deepfake-driven romance scam that targeted victims across Asia. The suspects reportedly used AI-generated video calls and a fraudulent crypto trading platform to steal over $46 million of digital assets.
Adding to the concern, a study led by University of Texas finance professor John Griffin revealed that romance scams led to more than $75 billion in losses globally between January 2020 and February 2024, with many operations traced to Southeast Asia.
Meanwhile, Hong Kong’s financial authorities are advancing regulatory oversight of the virtual asset space. On April 7, the Securities and Futures Commission (SFC) announced that licensed crypto trading platforms can now offer staking services. However, these firms must comply with strict regulatory guidelines to protect investors and ensure transparency around staking-related risks.
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