How do Chinese police track and seize cryptocurrency? Rare paper reveals forensic tools

Chinese police are employing advanced forensic tools to track and confiscate cryptocurrency, according to a rare technical report. Despite a government ban on virtual currencies since 2021, criminals continue to use them for illicit activities like scams, gambling, and money laundering due to their anonymity and lack of central oversight.

The journal Forensic Science and Technology published a paper on June 4 detailing the methods used by law enforcement. Authors from the Wenzhou Public Security Bureau and the Zhejiang Provincial Public Security Department's Criminal Investigation Corps outline the evidence collection, transaction tracing, and asset seizure processes. This provides an unprecedented look into how authorities pursue illegal virtual assets.

The report explains that understanding crypto tracking requires grasping how it is stored. Each Bitcoin and Ethereum wallet is controlled by a private key, a 64-digit hexadecimal string. Whoever possesses this key has control over the wallet's contents, highlighting the critical role of key management in both legitimate use and criminal activity.