Key Points
- India’s CERT-In identified CRAFTY FALCON as an active threat actor targeting cryptocurrency exchanges and financial institutions, while South Korea is reviewing exchange security following the reported Binance hack.
- South Korea is considering another delay to cryptocurrency taxation until 2029, Thailand plans to block Bitget over alleged unlicensed operations, and Hong Kong is advancing tokenized financial products and settlement infrastructure.
- Financial institutions across Japan, Hong Kong, and Singapore are developing stablecoin and tokenization initiatives, including a proposed partnership involving BlackRock and SBI Holdings and a new standards organization established by five major banks.
Asia’s digital asset industry is navigating two major developments: rising cybersecurity concerns and continued institutional adoption of blockchain-based financial infrastructure. Cryptocurrency exchanges are strengthening security measures as regulators assess the potential impact of increasingly sophisticated attacks, including threats involving artificial intelligence.
At the same time, regional financial centers are advancing stablecoin initiatives, tokenized investment products, and blockchain settlement systems. These developments illustrate how Asia’s digital asset market is moving toward a more structured environment in which cybersecurity, regulatory compliance, and institutional participation are becoming increasingly interconnected.
India Warns of AI-Assisted Attacks on Cryptocurrency Exchanges
India’s national cybersecurity agency, the Indian Computer Emergency Response Team (CERT-In), has warned that an AI-assisted threat actor is escalating attacks against cryptocurrency exchanges and other financial businesses.
On Wednesday, CERT-In designated the threat actor as CRAFTY FALCON, explicitly identifying cryptocurrency exchanges among the affected organizations. The advisory described an active and ongoing threat involving the theft of wallet credentials and the movement of funds from compromised accounts.
CERT-In said it continues to receive reports of successful attacks, including incidents involving non-banking financial companies and fintech businesses that had previously received restricted security advisories and undertaken remediation measures.
The warning follows an October report from cybersecurity firm CrowdStrike, which identified an unidentified attacker using ARTEX, an AI penetration-testing tool, alongside Claude Code and other AI models to target South Korean financial companies and steal data.
The developments highlight growing concerns that AI tools could increase the speed and sophistication of cyberattacks against financial institutions, placing additional pressure on exchanges to strengthen access controls, wallet security, and incident response procedures.
South Korea Strengthens Exchange Security After Binance Hack
South Korea’s Financial Services Commission has urged domestic cryptocurrency exchanges to increase the proportion of customer assets held in offline cold wallets following the reported $6.3 billion attack on Binance.
The FSC convened an emergency meeting with other regulators, cybersecurity agencies, and cryptocurrency service providers to review existing security arrangements.
The discussions covered information technology access controls, wallet withdrawal approvals, signing procedures, and administrator privileges. The commission also encouraged exchanges to increase their cold-storage allocations.
South Korean regulations already require exchanges to maintain at least 80% of customer cryptocurrency assets in cold storage. Reported figures show Upbit holding 99.17% of assets offline, followed by Bithumb at 94.76% and Coinone at 85%.
Separately, the Bank of Korea is surveying 31 financial institutions to assess their exposure to cryptocurrency-related risks.
The assessment includes scenarios involving a temporary shutdown of the country’s largest cryptocurrency exchange following a major hack, a prolonged cryptocurrency market downturn, and substantial losses at another financial institution connected to digital assets.
These scenarios indicate that regulators are examining not only the security of individual exchanges but also the potential consequences of digital asset disruptions for the wider financial system.
North Korea Rejects Allegations of Involvement in Binance Hack
North Korea has denied involvement in the reported $6.3 billion Binance hack after the United States attributed the incident to a hacking organization allegedly supported by Pyongyang.
Kim Yo Jong rejected the US allegations, describing the FBI’s claims as unfounded and suggesting that Washington was attempting to portray North Korea as a cybercriminal state.
The denial contrasts with years of allegations linking North Korean-affiliated hacking groups to cryptocurrency theft. However, Pyongyang disputes the specific claims concerning the Binance incident.
South Korea Supports Another Delay to Cryptocurrency Taxation
South Korea’s government has backed postponing the planned taxation of cryptocurrency gains by another two years, moving the proposed implementation date to 2029.
The proposal represents another delay in a tax framework that has encountered repeated implementation challenges.
The latest postponement would give investors additional time before the proposed taxation rules take effect, although the history of repeated delays leaves the eventual implementation timeline subject to further policy developments.
Hong Kong Advances Regulated Digital Asset Infrastructure
Hong Kong continues to expand its digital asset ecosystem through regulatory adjustments, institutional approvals, and initiatives involving tokenized financial products.
Crypto.com plans to discontinue its consumer application services in Hong Kong on February 1, 2027, while continuing to pursue regulatory approval for its institutional exchange.
The company said affected customers had received advance notice and would receive instructions for closing their accounts and withdrawing their funds.
Its local licensing application remains under a transitional status described as “deemed-to-be-licensed,” rather than receiving full regulatory approval.
In another development, Hong Kong-headquartered Animoca Brands secured authorization through its subsidiary, Animoca Asset Management (AD) Limited, from the Abu Dhabi Global Market’s Financial Services Regulatory Authority. The approval allows the subsidiary to manage investment funds for professional investors rather than retail customers, expanding Animoca’s asset management activities beyond its blockchain gaming and venture investment businesses.
Hong Kong’s monetary regulator has also expanded Project Ensemble to support round-the-clock settlement of tokenized transactions. The initiative is preparing to incorporate regulated stablecoins into trials involving tokenized government debt.
The city has additionally introduced secondary-market trading for Securities and Futures Commission-authorized tokenized funds through licensed platforms. Two China Asset Management money-market funds are now available for continuous trading through PantherTrade and the Futubull application.
These initiatives demonstrate Hong Kong’s efforts to establish a regulated environment for tokenized investment products and blockchain-based settlement services.
Thailand Moves to Block Bitget Over Licensing Dispute
Thailand’s Securities and Exchange Commission has filed a criminal complaint against BG Limited, the operator of cryptocurrency exchange Bitget, over alleged unlicensed digital asset trading activities.
The regulator plans to block access to Bitget’s website and application beginning December 5.
According to the SEC, Bitget offered cryptocurrency trading services in Thailand between 2022 and 2025, charged trading fees, and promoted its services to Thai users through websites and social media channels.
The regulator considers these activities violations of the country’s digital asset business licensing requirements. It has advised users to take appropriate action regarding assets held on the platform before the access restriction takes effect.
The case reflects the regulatory challenges facing international exchanges operating across jurisdictions with different licensing requirements.
Australia Raises Interest Rates as Inflation Pressures Persist
The Reserve Bank of Australia increased its benchmark interest rate by 25 basis points to 4.85%, its highest level in 18 years, as policymakers warned that inflation could remain elevated through much of 2027.
The monetary policy board approved the increase by a 6–3 vote, with three members preferring to maintain the rate at 4.60%.
The central bank cited energy costs and investment associated with artificial intelligence as factors contributing to inflationary pressure. It also postponed its forecast for inflation to return to the upper end of its 2%–3% target range until late 2027, approximately three quarters later than previously anticipated.
Meanwhile, Australia’s proposed capital gains tax changes have prompted cryptocurrency investors to reassess their investment structures. The government’s decision to remove the 50% capital gains discount for investments was described as a significant change for digital asset holders.
Potential approaches discussed by Australian investors include self-managed superannuation funds, corporate structures, and the possibility of future policy changes following the next election. Each approach carries different tax and regulatory considerations.
Japan Develops Yen-Based Stablecoin and Tokenized Fund Initiatives
Japanese yen stablecoin JPYC marked its first anniversary with a circulating supply of approximately 3 billion yen, reaching around one-quarter of its internal target.
Meanwhile, BlackRock, BlackRock Japan, SBI Holdings, and Startale signed a memorandum of understanding to explore connections between tokenized money-market funds and SBI’s JPYSC yen stablecoin.
The proposed collaboration reflects continued institutional interest in linking traditional investment products with blockchain-based financial infrastructure and yen-denominated digital settlement.
Vietnam Introduces 24-Hour Security Incident Reporting
Vietnam has introduced requirements for licensed cryptocurrency exchanges to report security incidents to authorities within 24 hours.
The Ministry of Finance rules also require exchanges to provide a remediation plan following an incident.
The framework introduces additional operational compliance obligations for digital asset businesses and emphasizes timely disclosure and corrective action following security breaches.
Singapore Banks Establish Tokenization Standards Organization
Five major financial institutions have launched the Global Layer One Organization (GL1) in Singapore, a nonprofit initiative intended to promote common standards for tokenized financial markets.
The founding participants include HSBC, JPMorgan’s Kinexys, MUFG, Société Générale-Forge under BNP Paribas, and Standard Chartered.
The organization aims to support common standards and interoperability as financial institutions develop blockchain-based products and services.
Its formation highlights the role of established banks in shaping the infrastructure and standards that could underpin the next phase of institutional tokenization.
Outlook
Asia’s digital asset market is progressing along two interconnected paths. Cybersecurity concerns are encouraging exchanges and regulators to strengthen custody arrangements, access controls, and incident reporting, while institutional participants continue developing tokenized funds, stablecoin settlement systems, and blockchain-based financial infrastructure.
The immediate challenge for cryptocurrency businesses is maintaining operational resilience as AI-assisted threats become more sophisticated and regulatory expectations expand. At the same time, initiatives across Hong Kong, Japan, and Singapore indicate that institutional adoption is advancing through regulated financial products and collaborative infrastructure projects.
For investors and market participants, the region’s next phase will depend on the balance between innovation, regulatory compliance, and security. Demonstrating reliable custody, transparent operations, and effective risk management may become increasingly important in determining which digital asset platforms and financial infrastructure providers attract sustained institutional participation.
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