Chinese Police Publish Rare Technical Paper on Crypto Forensics
According to a South China Morning Post report, Sun Shengbin from Wenzhou Public Security Bureau and Lou Yandi from Zhejiang Provincial Public Security Department's Criminal Investigation Brigade published a technical paper on June 4 in the journal Criminal Technology, systematically disclosing Chinese police forensic tools and case handling procedures for virtual currencies such as Bitcoin and Ethereum. This is a rare public revelation by Chinese law enforcement of their crypto tracking methods, attracting widespread attention from the crypto community.
Seed Phrase Extraction and On-Chain Tracking Methods
The paper notes that many users store seed phrases in phone memos, WeChat messages, or plain text files on computers. Therefore, the first step for investigators after seizing a suspect's device is to carefully examine it for any traces of private keys or seed phrases. In terms of on-chain tracking, the paper outlines several methods, one of which involves tracking transaction fees to trace back to exchanges like Binance, thereby allowing police to obtain user data. Police can also obtain Know Your Customer (KYC) records from major exchanges such as Binance, OKX, and HTX through formal legal channels.
Asset Freezing and Operational Compliance Boundaries
For funds stored on exchanges, police can freeze accounts for six months, with the possibility of extension. Additionally, the paper emphasizes strict operational boundaries: investigators must not hold private keys themselves. They must adhere to the principle of 'separation of case handling and custody,' implement comprehensive supervision, and establish a clear chain of custody records. These operational norms reflect the balance between efficiency and compliance in Chinese police's virtual currency enforcement, sending a new warning to crypto users regarding privacy and asset security.