Hong Kong Customs and Excise Department has joined forces with the University of Hong Kong (HKU) to develop advanced forensic tools for tracking virtual asset transactions, as part of a wider strategy to bolster digital finance oversight.
The collaboration first reported on June 12 by the South China Morning Post marks a critical step in reinforcing the city’s law enforcement capabilities amid a surge in crypto-related crime. It also complements Hong Kong’s broader ambitions to position itself as a global hub for regulated digital finance.
Cracking crypto crimes requires multi-agency support
According to Assistant Commissioner Mario Wong Ho-yin, Hong Kong Customs has investigated seven major cryptocurrency-linked money laundering cases between 2021 and May 2025. These cases involved over HK$9 billion in illicit flows, with transactions often spanning continents and hundreds of bank accounts.
“These money laundering threats are transnational and borderless. No single agency can tackle this problem alone,” Wong stated during a press briefing.
One particularly complex case traced over HK$1.8 billion moved through more than 1,000 transactions, involving five companies and 18 local bank accounts. Two suspects were found to have routed HK$760 million through a cryptocurrency platform—highlighting the scale and opacity of digital asset abuse.
HKU’s Role: Technical rigor in a legal arena
This partnership extends an earlier working relationship in which Hong Kong Customs leveraged HKU’s tools in copyright infringement investigations. Now, HKU’s School of Computing and Data Science, led by Professor Yiu Siu-ming, is helping design analytical systems tailored to virtual asset tracing and evidentiary requirements.
“Without HKU’s technical expertise, it would be extremely difficult to meet the evidentiary standards required by the courts,” Wong emphasized.
Professor Yiu underscored the urgency of keeping pace with fast-evolving crypto ecosystems, noting,
“As adoption accelerates, legal and regulatory frameworks must evolve accordingly. The safety and reliability of these platforms remain a major concern.”
Building regional enforcement capacity
Beyond tool development, the partnership has launched a training program for law enforcement officers both locally and internationally. A recent three-day workshop hosted participants from eight jurisdictions, including mainland China, India, and New Zealand, signaling Hong Kong’s intent to take a regional leadership role in crypto crime investigation.
So far, it remains unclear what the exact tools will be, as officials have yet to release any detailed information. Generally, blockchain forensics refers to the analysis of blockchain data to trace transactions, identify wallet owners, and uncover illicit activities such as money laundering or fraud.
Aligning crypto oversight with financial innovation
This initiative parallels the city’s e-HKD pilot, now in its second phase, which explores real-world applications of a central bank digital currency, such as settlement and cross-border payments. The convergence of enforcement tools and digital finance experimentation reflects Hong Kong’s integrated approach: advancing innovation while reinforcing systemic safeguards.
By combining academic research, cross-border law enforcement collaboration, and regulatory foresight, Hong Kong is not only cracking down on crypto-enabled financial crime but also setting a precedent for responsible digital asset governance in the region.
