Target tracking has a wide range of applications in Internet of Things (IoT), such as smart city sensors, indoor tracking, and gesture recognition. Several studies have been conducted in this area. Most of the published works either use vision sensors or inertial sensors for motion analysis and gesture recognition [1, 2]. Recent works use a combination of depth sensors and inertial sensors for 3D ranging and tracking [3, 4]. This often requires complex hardware and the use of complex embedded algorithms. Stereo cameras or Kinect depth sensors used for high precision ranging are instead expensive and not easy to use. The aim of this work is to track in 3D a hand fitted with a series of precisely positioned IR LEDs using a novel Lensless Smart Sensor (LSS) developed by Rambus, Inc.[5, 6]. In the adopted device, the lens used in conventional cameras is replaced by low-cost ultra-miniaturized diffraction optics attached directly to the image sensor array. The unique diffraction pattern enables more precise position tracking than possible with a lens by capturing more information about the scene.