**Vietnam Cracks Down on Unlicensed Crypto Trading: Fines Up to $1,900 for Retail Users**
Vietnam is taking a harder line on cryptocurrency trading, but faces a major hurdle: its regulated digital asset market isn’t ready yet. The country’s Finance Ministry has announced that retail crypto users trading on unlicensed overseas platforms like Binance, OKX, and Bybit could face fines of up to $1,900. Similarly, domestic investors trading cryptocurrencies not officially designated for local use could be fined up to $3,800. The crackdown also targets crypto companies that fail to obtain licenses, do not properly verify customers, or unlawfully handle crypto account data, with potential fines reaching $7,600.
However, the timing presents a significant problem. While the new regulations are set to take effect on September 1, Vietnam’s Finance Ministry has not yet issued any exchange licenses for its regulated digital asset market. Although five exchanges have been approved “in principle,” the lack of active licenses leaves many questions unanswered about how the new rules will be enforced.
—
### **Malaysia: Network School Faces Scrutiny Over Israeli Citizens**
In Malaysia, the “Network School” founded by Balaji Srinivasan in Forest City is under fire for alleged connections to Israeli citizens using second passports. The controversy, which has drawn international attention, revolves around claims that the school has become a hub for Israeli entrepreneurs. While dual nationals with Israeli passports are currently allowed to enter Malaysia, the country has no diplomatic relations with Israel and typically bans Israeli citizens from visiting. The incident has sparked debates about compliance and regulation, with the Immigration Department reportedly finding that the foreign nationals involved have valid documents.
—
### **Japan: Crypto Reclassified as Financial Assets**
Japan has moved to reclassify cryptocurrencies as financial assets, a decision made by the Japanese Parliament. The revision to the Financial Instruments and Exchange Act shifts crypto regulations from the Payment Services Act and introduces stricter penalties for unlicensed platforms, which could now face fines of up to 10 million yen or 10 years in jail. The new framework also includes a ban on insider trading in crypto, to be policed by the Securities and Exchange Surveillance Commission. On the positive side, current crypto tax rates of up to 55% will be reduced to approximately 20%, though the new tax rules won’t take effect until 2028.
—
### **South Korea: Crypto Enters Public Wealth Management**
South Korea is updating its national asset management framework to include cryptocurrency and intellectual property under the definition of “national assets.” This marks the first time a sovereign nation has embedded cryptocurrency into its asset management statutes. The Ministry of Economy and Finance is revising the 1950 State Property Act to shift the focus from asset management to value generation. Alongside this, the Financial Services Commission has begun sanction procedures against Upbit operator Dunamu following a $30 million hack, while victim compensation schemes for crypto scams are also being expanded. Other measures include plans for a national CBDC pilot and discussions around seizing self-hosted crypto wallets during investigations.
—
### **China and Hong Kong: Regulatory Updates**
Coinbase has reportedly begun allowing Chinese users to verify their accounts using only a Chinese ID card and address, bypassing the previous requirement of a Hong Kong address. However, China still does not appear on Coinbase’s list of supported countries. In Hong Kong, the first crypto-native tokenized fund by Baillie Gifford has been approved, offering professional investors direct ownership of blockchain-based assets.
—
### **Indonesia: Bybit Steps In**
Bybit has launched a regulated platform in Indonesia following its acquisition of local exchange NOBI. The platform will retain NOBI’s senior management team to oversee operations, signaling a more structured approach to crypto trading in the region.
—
### FAQ
**Q1: Why is Vietnam cracking down on crypto users now?**
Vietnam aims to regulate its crypto market to prevent illegal activities and ensure tax compliance. However, the lack of licensed exchanges has created uncertainty about enforcement.
**Q2: What happens to dual nationals with Israeli passports in Malaysia?**
Dual nationals are currently allowed entry, but the controversy may lead to restrictions on this loophole soon.
**Q3: When will Japan’s new crypto tax rules take effect?**
The new tax rates will come into effect in 2028.
**Q4: What changes are coming for South Korea’s crypto regulations?**
South Korea is embedding crypto into its national asset management framework and plans to address hacks and victim compensation through new legislation.
**Q5: Why is Coinbase allowing Chinese users to verify now?**
Coinbase is expanding access for Chinese users by allowing verification with just a Chinese ID and address, though the country remains unsupported in its official list.
—
### Conclusion
The global regulatory landscape for cryptocurrency continues to evolve, with countries adopting stricter rules while grappling with implementation challenges. Vietnam’s aggressive stance highlights the complexities of regulating a market that is still building the necessary infrastructure. Meanwhile, Japan and South Korea are taking steps to integrate crypto into their financial systems, balancing innovation with consumer protection. As regulations tighten, the onus is on platforms and users to adapt to an increasingly compliant environment.
