China Warns of Crypto Espionage Risks as Singapore Activity Rises

China’s Ministry of State Security warned that cryptocurrencies can facilitate espionage, money laundering and cyberattacks. It described digital assets as a tool that hostile foreign groups could use to disrupt financial order and threaten national security.

The ministry’s social media post warned that crypto transactions are not fully anonymous. Foreign intelligence agencies could use the belief that digital-asset transfers are difficult to trace when recruiting spies, it said. Blockchain records can allow authorities to track transactions involving widely used cryptocurrencies such as Bitcoin and Ether.

China banned domestic crypto exchanges in 2017 and prohibited cryptocurrency mining in 2021. Authorities later classified all crypto-related business as illegal.

Singapore’s crypto activity increased 55.4% to $284 billion in the year ended June 2026, according to Chainalysis. The increase restored Singapore’s position as the largest crypto economy in Central and Southeast Asia and Oceania. The wider regional market contracted 6.8% during the same period.

Institutional platform activity in Singapore rose 94% to $60 billion. Much of the volume came from market makers, over-the-counter trading firms and institutional brokerages. Existing platforms processed larger volumes, while the number of new services remained limited.

South Korea’s Financial Services Commission is considering a system for market-making in digital assets. The review followed sharp volatility in JPYC, a stablecoin linked to the Japanese yen, after trading began on Upbit on Sept. 17.

JPYC opened at 12 South Korean won and reached 37.6 won within an hour. The exchange attributed the increase to limited liquidity. Yoo Young-joon, the commission’s director of digital finance policy, linked the review to the efficiency and stability of digital-asset trading.

South Korea’s Virtual Asset User Protection Act does not exempt market makers from rules against market manipulation. The restriction has limited their ability to provide liquidity in local crypto markets.

U.S. payments company MoonPay has established a South Korean subsidiary to work with local financial institutions on remittances, payments, settlements and digital-asset distribution. The subsidiary still requires regulatory approval.

In Japan, Binance Pay will allow eligible overseas visitors to spend more than 100 cryptocurrencies at most merchants that accept PayPay. The service uses HIVEX, a payment framework connecting overseas QR payment systems with PayPay. Binance Pay settles through Tether’s USDT, while PayPay settles merchant transactions in Japanese yen.

Hong Kong’s Securities and Futures Commission and Accounting and Financial Reporting Council have agreed to share information and coordinate audit and assurance work involving licensed crypto firms. The agreement covers case referrals, mutual assistance, inspections and investigations.

HSBC is preparing a phased rollout of RedCoin, a Hong Kong dollar-backed stablecoin. The bank plans to begin with person-to-person and merchant payments before considering corporate and institutional uses. It is preparing an education campaign about scams involving digital tokens.