Australia’s $145M exchange scandal, Bitget claims 4th, China lifts NFT ban: Asia Express
Our weekly roundup of news from East Asia curates the industry’s most important developments.
Largest money laundering scandal in Australia unravels
Changjiang Currency Exchange, a money transmitter business based in Australia, has beenbustedin a $145 million ($230 million Aussie dollar) money laundering scandal.
On October 26 a 300-strong police operation spanning Melbourne, Sydney, Brisbane, Adelaide, and Perth arrested seven individuals — four Chinese citizens and three Australian nationals, after a 14-month investigation.
Operating under the front of a legitimate currency exchange business, police say that Changjiang Currency Exchange allegedly helped launder dirty funds and tainted cryptocurrency from investment scams and unregistered crypto exchanges.
In one single incident, a 37-year-old Chinese national was accused of using Changjiang’s services to launder $63 million (A$100M) worth of funds received from a multinational Ponzi scheme.
The investigation began after law enforcement officials noticed irregular traffic at Changjiang kiosks across Australia during a time of strict COVID-19 related lockdowns. Police have since seized $13.27 million (A$21M) in cash and various luxury items believed to have been purchased using proceeds of crime. The investigation remains ongoing.
Bitget’s colorful Q3
Crypto derivatives exchange Bitget has risen to become the fourth-largest by volume, trailing behind only that of Binance, OKX, and ByBit.
According to the October 20 report, Bitget claims that its market share has risen to 9.43%, compared to negligible volume just two years ago. During Q3 2023, the exchange says it onboarded over 9,000 traders along with 85,000 followers or copy-traders, who together achieved a net trading profit of $6.7 million. However, the combined industry trading activity fell by 23% year over year to $4.8 trillion in the quarter.
From July to September, Bitget’s user protection fund peaked at $368 million and now stands at $350 million. The exchange claims that it has no debt alongside a proof-of-reserves ratio exceeding 200%. In September, the firm launched a $100 million EmpowerX Fund dedicated to ecosystem development and hosted a namesake summit in Singapore. It also hired 60 staff in July for its Middle East expansion plans.
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China partially lifts bans on NFTs
After a year of harsh crackdowns on private blockchain enterprises, it appears that China has softened its stance somewhat.
According to local news reports on October 25, Xianyu (literally ‘Bored Fish’), Chinese internet conglomerate Alibaba’s flagship peer-to-peer marketplace, has removed its censorship of “nonfungible tokens” related keywords in its search tool and relisted Topnod NFT collectibles minted on Alibaba’s Ant Blockchain.
Due to regulatory uncertainty, Topnod digital collectibles were prohibited from listing on secondary markets. Last December, Cointelegraph reported the Chinese government’s official NFT trading platform was planned to launch this year. The exchange is still in development at the time of publication. Since 2021, China has officially banned almost all crypto-related activity saved for outright ownership of cryptocurrencies.
Blockchain connects interprovincial health insurance in China
Residents of Shanghai, Zhejiang, Jiangsu, and Anhui provinces can now submit and validate their health insurance claims using blockchain technology.
In a partnership with Alibaba’s Ant Insurance, users in the aforementioned regions can submit their claims online, and after blockchain verification for authenticity, receive their reimbursement within hours.
In one instance, an individual known as Mr. Wang submitted his claim for lung cancer treatment in Anhui, and received the full $17,800 (130,000 Chinese Yuan) reimbursement within two hours. Su Fang, Director of the Financial Insurance Institute of Shanghai University of Finance and Economics, commented:
“This time, all electronic financial and medical bills in the Yangtze River Delta have been opened and applied on a large scale in commercial insurance claims, marking the true application of the digital Yangtze River Delta construction. This not only brings real convenience to the people, but also improves the efficiency of insurance claims and effectively prevents moral hazard.”
Ant Insurance has operated a blockchain-powered claims portal since 2019. For the past four years, the platform has processed over 2.25 billion medical claims and improved information sharing between insurance providers and medical professionals.
Huaian uses blockchain to improve surveillance
The City of Huaian’s Jianpu People’s Court is using a combination of AI recognition, big data, and blockchain technology to improve law enforcement surveillance.
Starting October 25, the Jianpu People’s Court will create an “all-purpose” system for monitoring visitors entering and leaving court premises. As soon as a visitor is identified to be trespassing in an unauthorized area, the system will alert court bailiffs for their immediate apprehension. Officials say that the system can drastically reduce the patrolling of hard-to-monitor areas:
“Outside the court walls and in the public rest areas outside the courtroom of the main building, etc., intelligent behavior analysis technology can be used to capture and intelligently analyze the behavior of the parties, provide early warning of possible dangerous behaviors such as abnormal gatherings, strenuous exercise, fights, etc., and remind judicial police and other staff to pay attention and deal with it promptly and appropriately.”
Through the system, court bailiffs would gain access to all visitors’ movements and details within court premises. Augmented reality will also enhance hard-to-see areas for better resolution.
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The US Securities and Exchange Commission, under former chair Gary Gensler, used settlements to pressure founders of decentralized finance platforms from ever working in the industry again, according to venture capital firm Founders Fund partner Joey Krug.
“The thing people don’t really know about is that the government, in many cases, went to founders of DeFi protocols […] and basically told the founders you effectively have to do a settlement with us,” Krug said on stage at the ETHDenver conference on Feb. 27.
“In many cases, they said you also have to sign a thing that says you will never work in crypto again,” he added. “By the way, this agreement, you can’t really talk about it publicly because there’s a non-disparagement clause.”
Krug’s claim adds to a crypto industry rumor dubbed “Operation Chokepoint 2.0” that says the Biden administration tried to kill the local industry through regulators’ enforcement actions and by pressuring banks to cut off or limit services to crypto firms.
“These agencies would basically go to the founders, and they would say, ‘Hey, if you don’t agree to this, you’re just going to end up in jail.’”
Krug said such civil agencies would have to defer to the Department of Justice for it to file criminal charges, but “none of these matters have been referred to the DOJ yet.” He also claimed that “none of these founders actually broke the law.”
Krug said that at first, he “didn’t really believe” such settlements existed, but some founders — who he didn’t name — later showed him their agreements.
Joey Krug (left) on stage with Axios’ Brady Dale (right) at ETHDenver 2025. Source: Turner Wright/Cointelegraph
“Sure enough, there are clauses that say you can never work in crypto again [and] you can’t talk about this to anyone,” he said.
“It was just a crazy, crazy administrative state that got really out of control.”
The SEC did not immediately respond to a request for comment.
Related: Saga CEO discusses crypto industry’s shift toward GOP — ETHDenver
Since 1972, the SEC has included a “gag rule” in its settlements that forbids defendants from criticizing the agency’s claims — a clause that Commissioner Hester Peirce has said “undermines regulatory integrity.”
Krug said the only way DeFi founders could comment on the settlements is if Congress asked them to testify. He added there are “a lot of founders who would love to talk about how the government basically really screwed them over if Congress asked them to testify.”
Earlier this month, the bank-regulating Federal Deposit Insurance Corporation released nearly 800 pages of so-called “pause letters” that it sent banks and finance firms over their crypto services.
Both the US House and Senate held hearings on crypto debanking in early February that heard from crypto executives on their claimed torrid dealings with trying to access financial services under the Biden administration.
Magazine: How crypto laws are changing across the world in 2025
Additional reporting by Turner Wright.
The US Securities and Exchange Commission says it does not view memecoins as securities but warned any fraudulent tokens could still be subject to enforcement actions by other regulators.
The agency’s Division of Corporation Finance said in a Feb. 27 statement that, in its view, memecoins “do not involve the offer and sale of securities under the federal securities laws” and “are akin to collectibles.”
“As such, persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission,” the SEC said.
It added that memecoin buyers and holders wouldn’t be protected by US securities laws but said the fraudulent offer and sale of memecoins “may be subject to enforcement action or prosecution by other federal or state agencies.”
The SEC added it shared its views “as part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets.”
US President Donald Trump has moved to cull the SEC’s regulatory oversight of the crypto space, looking to make good on one of his campaign promises. The agency launched a Crypto Task Force last month to create a framework for digital assets.
Trump and first lady Melania Trump themselves had launched memecoins just days before they entered the White House on Jan. 20, which sparked criticism from many crypto commentators and some of Trump’s supporters.
Donald Trump’s memecoin, Official Trump (TRUMP), is down nearly 83% from its peak, while Melania Trump’s token, Melania Meme (MELANIA), is down 93.5% from its high, according to CoinGecko.
The TRUMP memecoin hit a peak of $73.43 a day before Trump assumed office but is now trading at around $12.66. Source: CoinGecko
The SEC’s statement comes after ABC News reported the same day that US House Democrats are set to introduce a bill banning public officials, including presidents, from being able to issue, sponsor or endorse any security, commodity or digital asset, including memecoins.
In its statement, the SEC said that memecoins “typically have limited or no use or functionality” and “tend to experience significant market price volatility.”
It added a memecoin doesn’t fit with “any of the common financial instruments specifically enumerated in the definition of ‘security’” — such as stocks or bonds — as they don’t give a yield or rights to “future income, profits, or assets of a business.”
The SEC said a memecoin doesn’t fit under the definition of an “investment contract” under the securities-defining Howey test — defined as money invested in a common enterprise, such as a business, where investors have an expectation of profiting from the efforts of others.
Related: Former CFTC lawyer says agency should take lead on memecoin regulations
“The offer and sale of meme coins does not involve an investment in an enterprise nor is it undertaken with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others,” the agency said.
“In other words, a meme coin is not itself a security.”
The SEC added that its statement doesn’t apply to memecoins inconsistent with its description of one, or any products labeled as a memecoin in a bid to hide from securities laws “by disguising a product that otherwise would constitute a security.”
“The Division will evaluate the economic realities of the particular transaction,” it said.
SEC Commissioner Hester Peirce, who is leading the agency’s Crypto Task Force, said earlier this month that many memecoins “probably do not have a home in the SEC under our current set of regulations.”
X Hall of Flame: Memecoins will die and DeFi will rise again — Sasha Ivanov
Recent efforts to “debank” crypto firms in the US revealed a “staggering” level of corruption among government officials, and the problem is not yet resolved, one banking executive said in a Feb. 27 interview during Bitcoin Investor Week.
“The magnitude of skullduggery that is happening in Washington D.C. is really incredible… and it’s not over yet,” Caitlin Long, Custodia Bank’s founder and CEO, said during a panel at the event.
In 2023, the US Federal Reserve, which regulates banks, stymied Custodia’s efforts to service crypto firms by denying the bank access to a master account, citing Custodia’s involvement in “crypto-asset-related activities.”
A master account would allow the bank to custody assets directly with the central bank and access payment rails for inter-bank transfers. Custodia took legal action against the Fed in a bid to reverse the decision.
Custodia Bank CEO Caitlin Long speaks at Bitcoin Investor Week. Source: Cointelegraph
Related: FDIC releases 790 pages of crypto-related letters in regulatory pivot
Industry outrage over alleged debanking reached a crescendo when a June 2024 lawsuit spearheaded by Coinbase resulted in the release of letters showing US banking regulators asked certain financial institutions to “pause” crypto banking activities.
US President Donald Trump, who started his term on Jan. 20, has criticized the prior administration’s approach to crypto-friendly banks and vowed to better integrate cryptocurrencies, including stablecoins, into the regulated financial system.
In a Jan. 23 executive order, Trump told agencies to prioritize “fair and open access to banking services” for digital asset firms.
Stablecoin scrum
However, the battle for regulatory clarity isn’t over, Long said. Instead, it has evolved into a multi-directional fight among different types of stablecoin issuers seeking preferential rules, she said.
There is an ongoing “scrum between the big banks… and the incumbent stablecoin issuers, and then there’s Tether,” which is not based in the US, Long said.
The result has been “this incredible flow of money that has gone from the banks and the crypto industry to people in [Washington] D.C., and they’re all going to fight,” Long said.
“I don’t know how it’s going to come out,” she added.
Magazine: Godzilla vs. Kong: SEC faces fierce battle against crypto’s legal firepower
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