Hong Kong Customs Develops New Tool to Tackle Crypto Money Laundering
Hong Kong Customs is partnering with a local university to develop a new technological tool aimed at identifying and tracking crypto transactions linked to money laundering, in a move that underscores growing concerns over virtual asset misuse in the financial system.
According to the South China Morning Post, seven out of 39 money laundering cases registered in Hong Kong between 2021 and May 2025 involved virtual assets, amounting to more than HK$9 billion (US$1.1 billion).
One of the most prominent cases in 2024 led to the arrest of three individuals suspected of carrying out over 1,000 suspicious transactions. The case involved HK$1.8 billion in total transfers, with approximately HK$760 million processed through a crypto trading platform.
In response to the rising tide of crypto-linked financial crime, Hong Kong Customs and the University of Hong Kong are jointly developing a specialised system to identify illicit activity in blockchain-based transactions.
Although the specifics of the project remain confidential, officials say the tool leverages forensic methods initially designed to detect online copyright violations, suggesting a sophisticated level of digital scrutiny.
Globally, authorities are issuing similar warnings over the money laundering risks posed by cryptocurrencies. Luxembourg’s 2025 National Risk Assessment flagged crypto exchanges as high-risk due to their broad user bases, anonymity features, and cross-border nature.
In Germany, law enforcement recently shuttered a platform called eXch, seizing US$38.2 million in digital assets tied to laundering proceeds from cyberattacks, including incidents linked to Bybit.
Meanwhile, in Australia, the financial intelligence agency AUSTRAC is sounding alarms over crypto ATMs, noting that more than 1,600 cash-accepting terminals nationwide could be used to funnel illicit funds with minimal oversight.
