Hong Kong Police Launch CryptoTrace to Combat 46% Rise in Crypto Crime

In a proactive measure to bolster its digital financial security, the Hong Kong Police have launched a groundbreaking blockchain forensics tool called CryptoTrace. This initiative, led by the Cyber Security and Technology Crime Bureau (CSTCB), aims to enhance the capabilities of law enforcement officers in tracking and combating illicit cryptocurrency transactions and the rising tide of cybercrime.

The CryptoTrace platform was officially unveiled at the Blockchain Security Summit 2025. It is the result of a collaborative effort between the CSTCB and the University of Hong Kong. The system is specifically designed to bolster investigative capabilities in cases involving cryptocurrency and virtual asset-related crimes, which have seen a notable increase in recent years.

According to the CSTCB, CryptoTrace offers “advanced intelligence and investigative support” to investigators dealing with complex cases that involve blockchain-based assets. In preparation for its launch, the bureau conducted training sessions in March 2025 to ensure that frontline officers are well-versed in the system's capabilities.

Beyond law enforcement, the CSTCB emphasized that the CryptoTrace project is part of a broader mission to support the responsible development of the web3 ecosystem. The bureau is actively working with industry stakeholders to “co-build a safer and more sustainable ecosystem,” although specific partners were not named. This collaborative approach underscores the authorities' commitment to working with the private sector and academia to develop secure blockchain ecosystems.

The University of Hong Kong detailed that CryptoTrace features advanced blockchain analytics, graph technology, and visualization tools. These tools enable investigators to trace laundered crypto funds across various wallets and chains, identify and geolocate suspects based on transaction behavior, and simplify investigations into scams on decentralized platforms. These capabilities are expected to significantly reduce investigation time and increase the success rate of prosecutions for cybercrime.

The introduction of CryptoTrace comes at a time when online criminality in the crypto space is on the rise. In October 2024, Hong Kong police arrested 27 individuals involved in a $46 million romance scam that utilized AI-driven deepfake technology video calls and a fake trading platform to defraud victims. This incident highlights the growing threat of cybercrime in the region and the need for advanced tools like CryptoTrace.

With the launch of CryptoTrace, Hong Kong is positioning itself as a leader in crypto crime prevention and digital asset regulation. As blockchain technology continues to evolve, the city’s efforts could serve as a model for other jurisdictions facing similar challenges in the web3 landscape.