China Debunks Crypto Anonymity as Hong Kong and South Korea Tighten Rules

China’s Ministry of State Security has debunked the notion that cryptocurrencies offer true anonymity, asserting that blockchain technology’s transparency and immutability make crypto transactions traceable. The MSS warned that while criminals may perceive crypto as a safe haven, blockchain records are public and can be linked to real-world users through specialized analysis. The Ministry also highlighted risks such as money laundering, cybercrime funding, and foreign espionage facilitated by cryptocurrencies.

Meanwhile, Hong Kong has expanded its regulatory oversight over licensed digital currency firms. On September 28, the Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) signed a new Memorandum of Understanding (MoU) to enhance financial and compliance reporting for virtual asset service providers (VASPs). The agreement supersedes a 2021 MoU and includes provisions for information sharing, case referrals, and coordinated inspections.

In South Korea, regulators are considering legalizing crypto market makers following a significant price surge of JPYC on the Upbit exchange. The token’s value jumped from 12 won to 37.6 won within an hour of its September 17 listing. The Financial Services Commission (FSC) is reviewing the potential introduction of a formal market-making system to improve the stability and efficiency of the digital asset market.