Hong Kong Police Roll Out ’CryptoTrace’—New Weapon Against Crypto Crime

Hong Kong law enforcement just upped their game in the digital arms race. Their new ’CryptoTrace’ tool targets crypto criminals hiding behind blockchain’s pseudonymity—because even decentralized finance leaves breadcrumbs.

The move signals regulators aren’t backing down. While privacy advocates will bristle, exchanges quietly cheer—every bust makes their compliance teams’ jobs slightly easier. After all, nothing legitimizes an asset class like cops treating it as real money.

One hedge fund manager yawns: ’Great, now do insider trading next.’

Hong Kong Crime Bureau Emphasizes Emerging Threats in Digital Asset Sector

The CSTCB’s Chief Superintendent Lam Cheuk-ho stressed the emerging threats in the crypto sector during his speech at the Cyberport Blockchain Security Conference 2025, held in April.

“[He emphasized] the importance of exchanges, regulators and law enforcement agencies sharing responsibilities,” the release noted.

Additionally, Chief Inspector Yan Ngan Hoi-yan analysed the trends and cases of anti-money laundering in crypto-related crimes.

The CSTCB officers took part in a summit hosted by the Blockchain Compliance Professionals Association, sharing their views on Hong Kong’s Web3 sector.

They also provided a “multi-faceted analysis” from the law enforcement point of view, emphasizing their determination to work with stakeholders “to build a safer and more sustainable Web3 ecosystem.”

Hong Kong Lost Staggering $3.1B in 2024

Titus, a legal firm in Hong Kong, noted that the city-state lost a staggering $3.1 billion in the first 10 months of 2024 to crypto-related scams.

In October 2024, the HK police shut down a group running a HK$360 million ($46.35 million) cryptocurrency investment scam.

Additionally, the government recently exposed a sophisticated scam related to the fake “National Hong Kong Coin.” The scam misled the public into believing the government WOULD soon launch an official digital currency.

Hong Kong was termed as the world’s second-most crypto-friendly city, per the latest Crypto Report 2025 by migration platform Multipolitan.