OK Group said it will work with police authorities in Nanjing to research the use of blockchain in anti-money laundering operations.
The company's OKLink subsidiary will work on "public security and social governance" blockchain applications, according to a company press release. An OKLink representative told CoinDesk the partnership aims to tackle money laundering, not everyday policing.
Despite China's crackdown on crypto mining and trading in the past year, blockchain technology remains a government favorite. Blockchain was declared a strategic technology in China's latest Five Year Plan, issued in March.
OKLink and Nanjing's Public Security Bureau will set up a research and development lab focused on on-chain data analysis, risk control and talent training, the statement said.
The lab takes its name from Oklink's flagship security product, Chaintelligence, a tool that can help track down illegally obtained crypto. The company says that Chaintelligence has already helped police in five Chinese provinces crack "dozens" of cases, successfully recovering 10 billion yuan ($1.5 billion) of assets.
Chinese police authorities are "very motivated" to bust crypto scams and track illegally obtained funds because they can make money for their departments, Chinese reporter Colin Wu noted on Twitter.
Founded in 2013 by OKEx founder Mingxing "Star" Xu, OK Group owns crypto exchange Okcoin, one of the largest in China. Last month, Xu filed to close Okcoin's Beijing company.