Hong Kong Police Unveil CryptoTrace Tool to Combat Rising Web3 Crime

In a significant move to safeguard its digital financial system, Hong Kong police have introduced a novel blockchain forensics solution called CryptoTrace. The initiative, spearheaded by the Cyber Security and Technology Crime Bureau (CSTCB), will equip officers with more advanced tools to track illicit crypto transactions and fight growing cybercrime. CryptoTrace: A Collaborative Effort The CryptoTrace platform was unveiled at the Blockchain Security Summit 2025 and is a result of the partnership between CSTCB and the University of Hong Kong. The system is designed to enhance investigative capabilities in cryptocurrency and virtual asset-related crimes, which have seen an increase in criminal activities in recent years. According to CSTCB, CryptoTrace provides “advanced intelligence and investigative support” to investigators who are handling complex cases that involve blockchain-based assets. In preparation for its launch, the bureau conducted training in March 2025 to familiarize frontline officers with the capabilities of the system. Strengthening the Web3 Ecosystem Aside from law enforcement, CSTCB reaffirmed that the project is part of the bigger mission to support the responsible development of the web3 ecosystem. The bureau further stated that it is working closely with industry stakeholders to “co-build a safer and more sustainable ecosystem,” without naming, however, the particular partners. This is a more collaborative stance on the part of authorities as they seek to work together with the private sector and academia in developing secure blockchain ecosystems. Inside the Technology: How CryptoTrace Works The University of Hong Kong explained that CryptoTrace boasts advanced blockchain analytics, graph technology , and visualization tools. These allow investigators to: Trace laundered crypto funds across various wallets and chains Identify and geolocate suspects based on transaction behavior Simplify investigations into scams on decentralized platforms These tools are expected to reduce investigation time significantly and increase the success rate of prosecutions for cybercrime. Reacting to the Rise of Crypto Crime The debut of CryptoTrace comes after a time when online criminality in the crypto space is on the rise. Police in Hong Kong in October 2024 arrested 27 individuals who were part of a $46 million romance scam that used AI-driven deepfake technology video calls and a fake trading platform to defraud victims. Globally, the threat is growing. A study commissioned by University of Texas finance professor John Griffin discovered that romance scams alone had cost victims over $75 billion from 2020 to early 2024, much of it tracked to Southeast Asian operations. A Proactive Advance in Digital Policing With CryptoTrace, Hong Kong is signaling that it wishes to be a leader in crypto crime prevention and digital asset regulation. As blockchain technology continues to evolve, the city’s effort could serve as the template for other jurisdictions grappling with the dark side of web3 innovation.

Source: BTC Pulse