Chinese law enforcement has disclosed a sophisticated suite of forensic tools used to track, seize, and freeze cryptocurrency, in a rare technical paper published on June 4, 2026 in the peer-reviewed journal Forensic Science and Technology. The disclosure offers the most detailed public accounting to date of how China's security apparatus pursues illicit virtual assets despite a nationwide ban on their use.

The Paper and Its Authors

The study was authored by Sun Shengbin of the Wenzhou Public Security Bureau, Lou Yandi of the Zhejiang Provincial Public Security Department's Criminal Investigation Corps, and their colleagues. It outlines a structured process covering evidence collection, transaction tracing, and asset seizure — a workflow that has rarely been described in open literature from China.

The paper's publication comes even as China tightens its crypto prohibitions. A 2021 government notice banned virtual currencies as a means of payment, and new rules issued earlier in 2026 extended restrictions to stablecoins and the tokenisation of real-world assets.

Why Crypto Persists Despite the Ban

Despite the legal prohibition, criminals continue to exploit Bitcoin, Ethereum, and other virtual assets for scams, gambling, and money laundering, according to the paper. The appeal lies in the pseudonymous nature of crypto transfers and the absence of central-authority approval requirements — features that complicate conventional financial surveillance.

The authors note that every Bitcoin and Ethereum wallet is controlled by a private key — a 64-digit hexadecimal string generated by a secure random number generator. Whoever possesses that key controls the wallet's contents, making key recovery a central challenge for investigators.

Forensic Tools and Platforms Named

The paper references several forensic and blockchain-analytics tools deployed by Chinese investigators, including products from Meiya Pico, as well as platforms such as Pinghang PF and Pinghang X. Major exchanges — including Binance, OKX, and HTX — are cited in the context of transaction tracing, reflecting how law enforcement maps fund flows across centralised platforms.

The paper also addresses device-level forensics, with iOS devices noted as a relevant evidence source, underscoring that investigators target the hardware holding wallet credentials, not just the blockchain itself.

What's Next

The disclosure signals that Chinese law enforcement capabilities in crypto forensics are maturing rapidly, even as the broader regulatory environment grows more restrictive. As China moves to clamp down on stablecoins and tokenised assets in 2026, the forensic infrastructure described in the paper is likely to be deployed with greater frequency against both domestic actors and cross-border flows. Observers will be watching whether this technical transparency is a precursor to formal international law-enforcement cooperation on crypto crime.