Asia Tightens Crypto Security Amid AI-Assisted Hack Threats

Asian cryptocurrency exchanges are strengthening their defenses as regulators report a rise in financially motivated attacks that increasingly use artificial intelligence. The measures come despite wider regional adoption of tokenization and stablecoins, highlighting growing tensions between blockchain innovation and cybersecurity.

India’s Computer Emergency Response Team (CERT-In) has identified an active threat actor known as “CRAFTY FALCON” that is targeting cryptocurrency exchanges, non-banking financial companies and fintech businesses at “machine speed.” The agency said attackers are stealing wallet keys and draining funds, with CSIRT-Fin continuing to receive reports of successful intrusions. CERT-In also cited CrowdStrike’s October report that an unidentified attacker used the AI penetration-testing tool ARTEX alongside Claude Code and other AI models to breach South Korean financial institutions and steal data.

South Korea’s Financial Services Commission has urged local exchanges to move more customer assets into offline cold wallets and tighten administrative access, withdrawal approvals and transaction-signing procedures. The guidance follows a reported $6.3 billion attack on Binance. South Korean law already requires exchanges to keep at least 80% of users’ assets in cold storage; Upbit reportedly stores 99.17%, Bithumb 94.76% and Coinone 85%.

The Bank of Korea is also surveying 31 financial institutions to assess their exposure to crypto-market disruptions. Its questions reportedly cover the impact of a prolonged shutdown at South Korea’s largest exchange following a major hack, as well as the effects of a steep cryptocurrency price decline and a sustained trading slump. The reviews reflect regulators’ growing concern that cyber incidents and market volatility could spill over into broader financial systems.