Asian crypto exchanges tighten security as hacks and AI threats surge

Asian crypto exchanges are scrambling to tighten security on fears of a wave of potentially AI-assisted hacks, even as regional governments embrace tokenization and stablecoins. India’s national cybersecurity agency warned that an AI-assisted threat actor has designated as CRAFTY FALCON has escalated its attacks on cryptocurrency exchanges and other financial businesses, stealing wallet keys and siphoning funds. CERT-In noted that the threat remains active and ongoing, with financial entities continuing to report successful breaches despite prior remediation efforts.

This security alert coincides with growing evidence of hackers deploying artificial intelligence tools against financial institutions globally. In October, cybersecurity firm CrowdStrike reported that an unidentified attacker utilized ARTEX alongside other AI models to breach South Korean financial firms. In response to these growing vulnerabilities and following the massive $6.3 billion attack on Binance, South Korea’s Financial Services Commission urged domestic cryptocurrency platforms to increase their proportion of assets stored in offline cold wallets.

Regulators have reviewed IT access controls, wallet withdrawal procedures, and administrator privileges across exchanges. Meanwhile, the Bank of Korea has initiated a survey of 31 financial institutions to evaluate potential operational impacts should a major digital asset exchange temporarily suspend operations following a hack or prolonged industry downturn. Pyongyang has denied involvement in the Binance incident, dismissing foreign intelligence assertions as absurd rhetoric.

Asian crypto platforms face intense scrutiny and security overhauls amid rising AI-driven cyber threats.

In regulatory developments, Crypto.com announced it will discontinue its consumer app services in Hong Kong on February 1, 2027, while it continues to pursue institutional regulatory approval. The company has operated under a deemed-to-be-licensed transitional status for nearly three years. Conversely, Animoca Brands secured authorization from Abu Dhabi regulators to manage non-retail investment funds through its subsidiary. Hong Kong has also expanded Project Ensemble to facilitate round-the-clock settlement of tokenized transactions and introduced secondary market trading for tokenized funds. Thailand’s securities regulator filed a criminal complaint against Bitget for operating without a local license and will block access to its platforms.

Why it matters

These developments highlight a critical friction point across Asian markets, where regulators are aggressively expanding digital asset infrastructure like tokenization and stablecoins while simultaneously battling sophisticated, AI-driven cybersecurity threats. For investors and financial institutions in India and across the wider region, heightened regulatory oversight and stricter cold storage mandates signal an era of tighter compliance and heightened operational risks.