Hong Kong Customs Partners with University to Combat Crypto Money Laundering

Hong Kong Customs has initiated a collaborative effort with the University of Hong Kong to develop an advanced tool designed to trace cryptocurrency transactions. This initiative is aimed at addressing the increasing prevalence of money laundering activities involving virtual assets.
The partnership was announced following the
of seven suspected money laundering cases, which collectively involved over HK$9 billion (US$1.1 billion) in recent years. This development underscores the growing concern over the misuse of cryptocurrencies for illicit financial activities.Mario Wong Ho-yin, Assistant Commissioner for Intelligence and Investigation at the Customs and Excise Department, highlighted that this effort is part of a comprehensive strategy to strengthen cooperation with academic institutions, the financial sector, and international law enforcement agencies. This collaborative approach is expected to enhance the region's capabilities in detecting and preventing cryptocurrency-related money laundering.
Among the 39 locally reported money laundering cases between 2021 and May 2025, seven specifically involved virtual assets. One notable case from 2024 resulted in the arrest of three suspects linked to over 1,000 suspicious transactions totaling HK$1.8 billion. Of this amount, HK$760 million was allegedly processed through a cryptocurrency platform, illustrating the scale and complexity of such operations.
While the specific details of the new tool remain confidential, Wong mentioned that it leverages forensic technology already employed by Customs to monitor online copyright violations. This adaptation of existing technology suggests a proactive approach to combating financial crimes in the digital age.
Crypto-related money laundering continues to be a significant global concern. Luxembourg’s 2025 National Risk Assessment highlighted that cryptocurrency exchanges still pose a “high” risk due to factors such as large client bases, anonymous online activity, and international operations. These vulnerabilities make it challenging for authorities to track and prevent illicit transactions.
In Germany, authorities took decisive action by shutting down
and seizing $38.2 million in crypto. The platform was accused of laundering funds from major hacks, including those targeting Bybit. This enforcement action underscores the international effort to curb cryptocurrency-related financial crimes.In Australia, AUSTRAC has flagged crypto ATMs as a growing threat, warning providers of legal action if they fail to meet anti-money laundering standards. With over 1,600 machines now operating across the country, most accepting cash, regulators have expressed concern that these ATMs offer an easy route for criminals to move illicit funds. This highlights the need for stringent regulatory measures to mitigate the risks associated with cryptocurrency transactions.

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