China Warns Crypto Used in Espionage as Singapore Activity Surges and Asia Regulates

China’s Ministry of State Security has toughened its rhetoric on the risks of cryptocurrencies, highlighting their role in crime and stressing transactions are not really anonymous.

According to the South China Morning Post the spooks published an article on social media stating cryptocurrencies are used to facilitate money laundering and cyberattacks and serve as “accomplices” in espionage.

The MSS stated that crypto is often used by “overseas anti-China hostile forces” to disrupt financial order and harm national security.

The warning that crypto isn’t as anonymous as most people assume, seemed to be a coded warning aimed at would-be foreign spies who mistakenly believe they could send or receive payments without the authorities knowing:

“Overseas intelligence agencies would try to dispel the concerns of people they were trying to recruit as spies by claiming that the circulation of virtual currencies was hard to verify, according to the Ministry.”

We’re watching the blockchain was the message. While the warning holds true for most cryptocurrencies like Bitcoin and Ethereum, Monero or Zcash are totally private when used correctly.

China banned crypto a number of times, before a comprehensive ban on exchanges in 2017 and a later ban on mining in 2021. It has also declared all crypto businesses illegal.

Singapore’s crypto activity rose 55.4% to $284 billion in the year ended June 2026, bucking a regional contraction and regaining its position as the largest crypto economy in Central and Southeast Asia and Oceania (CSAO), according to Chainalysis.

Much of the growth came from institutional platform activity, which increased 94% to $60 billion, concentrated among a small number of market makers, over-the-counter trading firms, and institutional brokerages. Chainalysis said the broader CSAO crypto economy contracted 6.8% over 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 told Cointelegraph.

Total crypto economic activity in CSAO. Source: Chainalysis

South Korea’s Financial Services Commission said it is considering a market-making system for digital assets, after a stablecoin linked to the value of the Japanese yen traded for as much as four times its peg on a major South Korean crypto exchange earlier this month.

Crypto exchange Upbit opened trading of JPYC, a yen-backed stablecoin, on Sept. 17, with the market opening at 12 Korean won per JPYC before reaching a high of 37.6 Korean won just an hour later, more than four times its market value. The 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,” Yoo Young-joon, director of digital finance policy at the FSC, said.

South Korea’s Virtual Asset User Protection Act currently does not contain an exemption for market-making from its market manipulation provisions, preventing market makers from providing liquidity in the country’s crypto markets.

MoonPay launches Korea operations

United States payments and infrastructure firm MoonPay has launched a South Korean subsidiary. It will work with local financial institutions on remittances, payments, settlements and digital asset distribution. It has yet to receive the required approvals however.

Binance Pay will allow eligible overseas users visiting Japan to spend more than 100 cryptocurrencies at the vast majority of PayPay-supported merchants starting Wednesday.

The service will run through HIVEX, a payment interoperability framework that connects overseas QR payment services to PayPay-supported merchants in Japan. Binance Pay uses Tether USDt (USDT) as its backend settlement layer, while HIVEX settles with PayPay and PayPay settles merchants in yen.

Binance told Cointelegraph it is the first crypto payment service to access PayPay-supported merchants through HIVEX. Merchants will not need to opt in separately, it said.

PayPay is a Japanese cashless payment service accepted at millions of locations nationwide, including major chains, smaller retailers, vending machines, taxis and public transportation. It lists nine other overseas payment services supported through HIVEX, mainly from China, Hong Kong and Taiwan.

Shibuya Crossing. Source: Jezael Melgoza

Hong Kong regulators have signed an agreement to expand their cooperation on financial reporting and audits of licensed crypto firms.

The Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) agreed to work togethere on audit and assurance work and establishes a framework for information sharing, case referrals, mutual assistance and coordinated inspections and investigations for licensed crypto firms.

HSBC’s new Hong Kong dollar stablecoin is called RedCoin