Crystal tears were once thought to be the tear drops of a god, that were crystallized during the ice age, and later burried under the ground over time. No one believes that anymore, so it lost its value and has just become a rare crystal.
When the people of the wolrd believed them to be the tears of a god, they gather every one that they could and hide them in underground temples. Most of these temples have been destroyed but few still remain. They should be found in a chest of sorts in the temples.
Like many jewels, a crystal tear has no purpose other than trading. It is worth slightly more than a blood diamond, but is also slightly harder to find.