Local crypto firms in talks with Hong Kong’s SFC on crypto staking

Regulatory Caution Among Asian Nations Amid Reports of Illicit FinancingWith a plethora of reports of crypto-related terrorist financing having been published in recent weeks, it’s understood that Asian nations may be looking to exercise caution when it comes to the current ongoing process of establishing regulatory guidelines for crypto.That’s according to a report published by the South China Morning Post (SCMP) on Thursday. The use of cryptocurrency by Hamas to fund its attack on Israel is being seen as the catalyst that may drive authorities in various Asian nations to take a more cautious approach to regulating digital currencies, according to analysts cited by the publication.Raj Kapoor, the founder of India Blockchain Alliance (IBA), commented on these recent developments, stating:”It is a kick on the backside for most governments. All regulatory bodies will take a closer look at crypto regulation. Governments will need to start implementing new rules and regulations.”At the recent G20 summit held in New Delhi, a joint declaration called for the regulation, supervision, and oversight of crypto assets, among other measures. The declaration emphasized the importance of supporting “a coordinated and comprehensive policy and regulatory framework.”Kapoor stressed the importance of revisiting the declaration and developing solutions to implement its objectives.Photo by Adolfo Félix on UnsplashRenewed scrutinyEvents in Palestine in recent weeks have led to renewed scrutiny when it comes to monitoring illicit financing activity via cryptocurrency. Only days following the recent Hamas attack, Israeli authorities moved to freeze specified crypto accounts.That scrutiny has continued in recent days, with more accounts having been frozen on crypto platforms such as Binance, while more still have been identified as suspicious, with requests for further information having been submitted in respect of over 200 additional accounts.On Wednesday it emerged that the United States Treasury’s Office of Foreign Assets Control (OFAC) had sanctioned a Gaza-based crypto platform.Potential over-reactionWhile crypto-related terrorist financing has been widely publicized, blockchain analytics firm Chainalysis warned on Wednesday that crypto’s role in this illicit activity has likely been overstated. In its blog post on the subject, the firm stated:“Although terrorism financing is a very small portion of the already very small portion of cryptocurrency transaction volume that is illicit, some terrorist organizations raise, store, and transfer funds using cryptocurrency.”Additionally, Chainalysis stated that it had seen “overstated metrics and flawed analyses of these terrorist groups’ use of cryptocurrency.” Peter Van Valkenburgh, Director of Research at non-profit crypto advocacy group Coin Center, also believes that reporting on the matter is not balanced. Taking to X, he stated:“Sensational early reporting on the scale of Hamas crypto fundraising significantly misstated the amounts involved.”Coin Center’s Director of Communications, Neeraj Agrawal, highlighted an article which claimed that crypto “fueled Hamas’ terror attack on Israel” in its title, only to reveal within the body of the article that “cryptocurrency is still far from the largest funding source for terrorism.”Anndy Lian, a Singapore-based author and inter-governmental blockchain adviser, noted that while some countries may consider banning cryptocurrencies as a solution, this could merely drive illicit financing underground and make it more challenging to trace and halt. Lian argued that cryptocurrencies are traceable and trackable, unlike traditional fiat currencies like US dollars.

Credit Saison, one of the largest credit card issuers in Japan, is accelerating its global venture strategy with the creation of Onigiri Capital, a new fund targeting early-stage startups building on blockchain technology. Set up in Singapore last month through Credit Saison’s corporate venture arm, Saison Capital, the vehicle is aiming for up to $50 million in commitments and will run for 10 years, with an optional two-year extension. The fund has already secured $35 million toward its target.Photo by Markus Winkler on UnsplashBuilding on a fintech track recordThe initiative is part of Credit Saison’s broader plan to expand in emerging markets and spur innovation in financial services, drawing on Saison Capital’s track record. Established in 2019, the venture arm has backed fintech startups across Asia and, since 2021, has increasingly focused on blockchain-based finance, investing in more than 40 companies. The firm said those investments laid the groundwork for Onigiri Capital, which will also enable other financial institutions to invest alongside Credit Saison in promising blockchain ventures. Onigiri Capital will concentrate on five areas: stablecoins, payments, asset tokenization, decentralized finance (DeFi), and financial infrastructure. The fund will invest primarily at the seed and early stages, with an emphasis on long-term growth. Managing the fund are Qin En Looi, a partner at Saison Capital involved in over 40 blockchain investments, and Hans de Back, a venture investor with more than two decades of experience. Cross-border stablecoin pilotThe launch comes as Japan steps up efforts in digital assets beyond investment alone. According to Electronic Times, the first phase of “Project Pax,” a cross-border stablecoin remittance pilot involving financial institutions in Japan and South Korea, concluded successfully last week. Participants were Progmat—a tokenization platform backed by a consortium of major institutions, including MUFG—along with Datachain and Shoko Chukin Bank from Japan, and Shinhan Bank, NH Nonghyup Bank, and Kbank from South Korea. Fair Square Lab and Korea Digital Asset Custody helped develop an application programming interface (API) for the trial. The pilot demonstrated the feasibility of a network that converts fiat currency into stablecoins for on-chain transfers and then back into local currency at the destination, an approach expected to reduce the time and cost of cross-border payments. The results add momentum to Japan’s bid to modernize financial infrastructure, a backdrop that Onigiri Capital aims to capitalize on as it deploys capital into the sector. 

South Korea’s crypto market, long known for frenzied retail trading and the Kimchi premium, is losing some of its speculative heat as local demand weakens and regulators tighten their grip on the sector.Photo by Ciaran O'Brien on UnsplashThe shift is showing up in the Kimchi premium, the price gap that once saw crypto assets trade higher on Korean exchanges than overseas. That premium has now turned negative, meaning digital assets are cheaper on Korean platforms than on global exchanges. Retail sentiment has soured alongside it: a weekly CoinNess and Kratos survey found that 58.8% of respondents expect Bitcoin to fall or crash in the coming week, up from 28.6% a week earlier. Only 17.7% expect a price surge, down from 36%, while 23.5% expect sideways trading. Weak market, thin liquidityInvestors blamed the persistent negative premium on several factors. The largest specific cause, cited by 25.4% of respondents, was broader market weakness and liquidity outflows. Another 22.7% said a strong stock market has reduced the appeal of crypto, while 16.5% pointed to limitations of local crypto exchanges. The remaining 35.4% said all of these factors are working together. South Korean exchanges are also becoming late-stage listing venues rather than early platforms. According to IOSG Ventures, Coinbase, Binance Futures, and Bybit often lead early price discovery, while Upbit and Bithumb tend to wait for broader market validation before adding new assets. IOSG found that 85% of Bithumb’s listings came after comparable listings on major global platforms, while Upbit listed assets an average of 28 days after their first overseas debut. The lag reflects lengthy regulatory reviews and a preference for more established projects. Regulation is shifting as well. According to SBS News, the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC) has decided against a proposed blanket reporting rule for crypto transfers above 10 million won, or about $6,500, to foreign virtual asset service providers (VASPs) or personal wallets. Instead, local VASPs must operate their own internal, risk-based anti-money laundering (AML) controls. Police probe Polymarket usersLaw enforcement is also targeting decentralized prediction markets. Local law firm Jonjung reported on a blog post that the Gangwon Provincial Police Agency has launched an investigation into South Korean Polymarket users over possible violations of the country’s gambling laws. Ahn Chang-bo, managing partner at the law office, said police are tracking crypto transaction records to identify and summon users. However, he noted that whether participation in Polymarket violates South Korea’s gambling laws remains unsettled, as prosecutors have not taken a definitive position and courts have yet to rule on the issue. South Korea remains a major crypto market, but the tone has changed. Local demand has weakened, exchanges are slower to list new tokens, and authorities are taking a closer look at both compliance and emerging platforms such as Polymarket.