China Warns of Blockchain’s Role in Crime and Espionage
China’s Ministry of State Security has intensified its warnings regarding the risks associated with cryptocurrencies, emphasizing their use in criminal activities and asserting that transactions are not truly anonymous.
According to the South China Morning Post, the ministry published a social media post stating that cryptocurrencies are employed to facilitate money laundering and cyberattacks, acting as “accomplices” in espionage. The MSS claimed that crypto is frequently utilized by “overseas anti-China hostile forces” to destabilize the financial order and undermine national security.
The warning about crypto’s lack of anonymity appeared to be a veiled message directed at potential foreign spies who might mistakenly believe they could conduct payments undetected by authorities. The underlying message was clear: “We’re watching the blockchain.” While this statement holds true for most cryptocurrencies like Bitcoin and Ethereum, privacy-focused coins such as Monero or Zcash can offer complete anonymity when used correctly. China has previously banned cryptocurrencies multiple times, culminating in a comprehensive ban on exchanges in 2017 and a subsequent ban on mining in 2021. All cryptocurrency-related businesses have also been declared illegal.
Singapore’s Crypto Economy Surges Amid Regional Contraction
Singapore’s cryptocurrency activity experienced a significant growth of 55.4%, reaching $284 billion in the year ending June 2026. This surge allowed the city-state to reclaim its position as the largest crypto economy in Central and Southeast Asia and Oceania (CSAO), according to data from Chainalysis. This performance stands in contrast to a regional contraction in the crypto market.
A substantial portion of this growth was driven by institutional platform activity, which saw a 94% increase to $60 billion. This activity was primarily concentrated among a select group of market makers, over-the-counter trading firms, and institutional brokerages. Chainalysis noted that the broader CSAO crypto economy contracted by 6.8% during the same period.
“The growth in Singapore’s institutional platform ecosystem was very concentrated and marked by mostly high-volume activity by existing platforms rather than the dynamic entry of new services,” Chainalysis informed Cointelegraph.
South Korea Considers Legalizing Crypto Market Makers
South Korea’s Financial Services Commission (FSC) is reportedly considering the introduction of a market-making system for digital assets. This move comes in the wake of a stablecoin linked to the Japanese yen trading at up to four times its pegged value on a major South Korean crypto exchange earlier this month.
On September 17, crypto exchange Upbit began trading JPYC, a stablecoin backed by the Japanese yen. The trading commenced at 12 Korean won per JPYC and surged to a high of 37.6 Korean won within an hour, more than quadrupling its market value. This price spike was attributed to limited liquidity on Upbit.
“We will also review the need to introduce systems such as market-making activities to increase the efficiency and stability of the digital asset landscape,” stated Yoo Young-joon, director of digital finance policy at the FSC.
Currently, South Korea’s Virtual Asset User Protection Act does not include an exemption for market-making from its market manipulation provisions, effectively preventing market makers from providing liquidity in the country’s crypto markets.
In related news, U.S. payments and infrastructure firm MoonPay has launched a South Korean subsidiary. The subsidiary aims to collaborate with local financial institutions on remittances, payments, settlements, and digital asset distribution, though it is still awaiting the necessary regulatory approvals.
Binance Pay Expands to PayPay Merchants in Japan
Eligible overseas users visiting Japan will soon be able to spend over 100 cryptocurrencies at the vast majority of merchants that support PayPay, starting Wednesday, through Binance Pay.
This service will operate via HIVEX, a payment interoperability framework that connects overseas QR payment services with PayPay-supported merchants in Japan. Binance Pay utilizes Tether USDt (USDT) as its backend settlement layer, while HIVEX settles with PayPay, which in turn settles merchants in Japanese yen.
Binance informed Cointelegraph that this marks the first crypto payment service to gain access to PayPay-supported merchants through HIVEX. Merchants will not be required to opt in separately for this service. PayPay is a widely adopted cashless payment service in Japan, accepted at millions of locations nationwide, including major retail chains, smaller businesses, vending machines, taxis, and public transportation. It currently supports nine other overseas payment services through HIVEX, primarily from China, Hong Kong, and Taiwan.
Hong Kong Regulators Enhance Cooperation on Crypto Audits
Hong Kong regulators have signed an agreement to bolster their cooperation on financial reporting and audits for licensed cryptocurrency firms.
The Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) have committed to working together on audit and assurance work. This collaboration establishes a framework for information sharing, case referrals, mutual assistance, and coordinated inspections and investigations concerning licensed crypto firms.
In parallel, HSBC is planning a phased rollout of RedCoin, its new Hong Kong dollar-based stablecoin. The initial phase will focus on person-to-person and merchant payments, with subsequent expansion into corporate and institutional use cases. HSBC is also launching an educational campaign to help the public avoid cryptocurrency scams.
