Cybersecurity warnings and regulatory moves across Asia and the Middle East highlighted a common theme this week: crypto businesses are being pushed to tighten defenses, improve operational controls, and adapt to rapidly evolving oversight. India’s CERT-In named an AI-assisted threat actor targeting crypto exchanges, while South Korea urged exchanges to hold more assets in cold storage after the Binance hack.
At the same time, regulators from Thailand to Vietnam moved to crack down on unlicensed activity and tighten incident reporting. Beyond security, Hong Kong and Singapore also advanced tokenization and settlement pilots, signaling that institutional infrastructure is continuing to expand even as compliance expectations rise.
Key takeaways
- India’s CERT-In designated an AI-assisted threat actor, “CRAFTY FALCON,” warning attacks on crypto exchanges and financial businesses are active and ongoing.
- South Korea’s Financial Services Commission urged exchanges to increase cold-wallet holdings, reviewing access controls and withdrawal approval processes after the Binance breach.
- Vietnam’s finance ministry rules require licensed exchanges to report security incidents and remediation plans within 24 hours.
- Crypto.com said it will discontinue consumer app services in Hong Kong on Feb. 1, 2027 while continuing to pursue approval for its institutional exchange.
- Thailand’s securities regulator filed a criminal complaint against Bitget for allegedly operating without a license and plans to block access from Dec. 5.
India names AI-assisted “CRAFTY FALCON” in crypto-targeting warning
India’s national cybersecurity agency, CERT-In, warned that an AI-assisted threat actor has escalated attacks on cryptocurrency exchanges and other financial businesses. In a Wednesday advisory, CERT-In designated the actor as “CRAFTY FALCON” and explicitly included crypto exchanges among affected entities.
CERT-In said the threat is active and ongoing, adding that its financial sector incident response team (CSIRT-Fin) has continued receiving reports of successful attacks. The agency noted that the reports also include cases affecting non-bank financial companies (NBFCs) and fintech firms that had previously received restricted advisories and implemented remediation steps.
The warning fits into a broader pattern of cybercriminal toolchains becoming more automated. Earlier reporting by Cointelegraph cited a CrowdStrike analysis from October that described an unidentified attacker using ARTEX—an AI penetration-testing tool also mentioned in CERT-In’s advisory—alongside other AI models to breach South Korean financial organizations and steal data.
South Korea pushes exchanges to raise cold storage and audits internal controls
South Korea’s Financial Services Commission (FSC) urged domestic crypto exchanges to increase the portion of assets held in cold wallets following the reported $6.3 billion Binance hack. The regulator said it held an emergency meeting with other regulators, cybersecurity agencies, and crypto service providers to review current security measures.
According to the FSC, the review focused on exchanges’ IT access controls, wallet withdrawal approval and signing procedures, and administrator privileges. Beyond process review, the commission also urged providers to increase the proportion of assets stored offline in cold wallets.
Importantly, South Korean law already requires exchanges to keep at least 80% of users’ crypto assets in cold storage. The advisory referenced compliance levels at several major venues, including Upbit at 99.17%, Bithumb at 94.76%, and Coinone at 85%. That means the FSC’s message is less about meeting a baseline requirement and more about pushing firms toward stronger operational hardening and possibly higher practical cold-storage ratios.
Regulators widen the net: incident reporting, criminal complaints, and app shutdowns
Outside South Korea, enforcement actions and compliance rules continued to take shape. In Vietnam, the ministry of finance introduced requirements for licensed cryptocurrency exchanges to report security incidents and their remediation plans within 24 hours. This rule is designed to force faster disclosure to regulators and reduce the window in which systems could be further exploited or compromises could be misunderstood.
Thailand’s regulator, meanwhile, moved from policy into a formal legal action. Thailand’s Securities and Exchange Commission filed a criminal complaint against BG Limited, the operator of exchange Bitget, alleging the company operated without a license. The regulator also said it will block access to Bitget’s website and app from Dec. 5, and advised users to take action regarding assets held on the platform before the deadline. The SEC said Bitget offered crypto trading between 2022 and 2025, charged trading fees, and promoted services to Thai users through websites and social media—activities it said violated Thailand’s digital asset business licensing requirements.
In Hong Kong, market access is shifting for some retail-facing services even as institutional development continues. Crypto.com said it will discontinue its consumer app services in Hong Kong on Feb. 1, 2027, while continuing to pursue regulatory approval for its institutional exchange. A company spokesperson told Cointelegraph that affected customers have received advance notice, with instructions for closing accounts and withdrawing funds. Cointelegraph’s reporting also noted that the local entity has been in a “deemed-to-be-licensed” status for nearly three years rather than full regulatory approval.
Asia advances tokenized finance: settlement pilots, secondary trading, and standards
While regulators concentrated on risk controls and enforcement, parts of Asia also pushed forward with tokenization and infrastructure initiatives. Hong Kong expanded its Project Ensemble pilot to enable round-the-clock settlement of tokenized transactions. The city’s monetary regulator is also preparing to bring regulated stablecoins into trials involving tokenized government debt.
Hong Kong also introduced secondary market trading for certain tokenized funds. According to Caixin Global, the city officially opened secondary trading for SFC-authorised tokenized funds through licensed exchanges, with two China Asset Management money-market funds able to trade continuously via PantherTrade and the Futubull app.
In Singapore, five banks launched a standards-focused organization called the Global Layer One Organization (GL1), a non-profit aimed at promoting standards for tokenized financial markets. The group includes HSBC; JPMorgan’s Kinexys; MUFG; Société Générale-Forge under BNP Paribas; and Standard Chartered. The move suggests that banks and market infrastructure providers are continuing to coordinate on interoperability and best practices as tokenized market activity grows.
What to watch next
The immediate priority for crypto operators is responding to security and compliance pressure: India’s named threat actor and South Korea’s cold-storage push both point to a tighter scrutiny of operational controls and custody practices. At the same time, faster incident reporting rules and platform access actions in Vietnam and Thailand indicate enforcement will likely accelerate—so exchanges and service providers should focus now on auditability, custody resilience, and regulator-ready incident workflows.
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