Hong Kong developing tool to track crypto-based money laundering: report

Hong Kong Customs is partnering with the University of Hong Kong to develop a new tool for tracing cryptocurrency transactions, aiming to combat rising virtual asset-related money laundering activity.

The partnership comes as authorities reveal seven suspected cases totaling more than HK$9 billion (US$1.1 billion) in recent years, according to South China Morning Post reporting. 

Mario Wong Ho-yin, Assistant Commissioner for Intelligence and Investigation at the Customs and Excise Department, said Thursday that the effort is part of a broader strategy to enhance cooperation with academia, the financial sector, and international law enforcement.

Among 39 locally reported money laundering cases between 2021 and May 2025, seven involved virtual assets, according to SCMP. One 2024 case led to the arrest of three suspects tied to more than 1,000 suspicious transactions totaling HK$1.8 billion, with HK$760 million allegedly processed through a cryptocurrency platform.

While specific details of the tool remain confidential, Wong noted that it builds on forensic technology already used by Customs to monitor online copyright violations, according to the report.

Crypto money laundering still a big concern

Crypto-related money laundering remains a global concern, with Luxembourg’s 2025 National Risk Assessment warning that exchanges still pose a “high” risk despite lower trading volumes. The country cited large client bases, anonymous online activity, and international operations as key vulnerabilities.

In Germany, authorities shut down eXch and seized $38.2 million in crypto, accusing it of laundering funds from major hacks like those targeting Bybit.

In Australia, AUSTRAC recently 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 say they offer an easy route for criminals to move illicit funds.