By Petra Zhu
The age of blind trust is over; the crypto industry in South Asia needs to be able to prove that user assets are safe in order to stay in business.
Sifting through the 2024 crypto security reports feels a bit like getting a weather forecast for a sunny day while you’re already soaked from a thunderstorm. After a record $2.2 billion vanished to hacks, the gulf between marketing spin and on-chain reality is impossible to miss.
The whole industry needs to wake up right now: the day of putting aggressive marketing ahead of funds protection is over. People don’t believe flamboyant claims anymore; they want proof that their information is safe.
A Global Problem with Local Scars
While the headlines often focus on massive, nine-figure heists, the reality of crypto-related crime is felt most acutely on a personal level. With data showing a 200% quarter-over-quarter surge in detected fraud attempts, the rise in scams and fraud is resulting in a crisis of confidence that threatens to derail mainstream adoption.
This crisis of confidence is especially acute across South Asia, which has eagerly embraced digital assets. In the first quarter of 2025 alone, crypto exchange MEXC flagged nearly 27,000 accounts in the region for participating in fraudulent trading activity, outpacing the numbers from Indonesia (5,603) and the CIS region (6,404) combined.
The region presents a fascinating contrast in national strategy. In Pakistan, the government is making a bold move to make the country a hub for digital assets, establishing a new Crypto Council and allocating 2,000 megawatts of surplus electricity to attract Bitcoin mining operations.
Meanwhile, India has introduced a comprehensive tax framework for digital assets while simultaneously developing its own central bank digital currency, the Digital Rupee (e₹).
The stories emerging from India and Pakistan are urgent calls for a fundamental change in the way platforms handle their duty of care.
India has become a fertile ground for a variety of cryptocurrency scams. The high-profile hack of the WazirX exchange in July 2024, attributed to the North Korean Lazarus Group, resulted in a loss of approximately $234.9 million. The incident became a cruel reminder of crypto platforms’ inherent vulnerabilities and forced the exchange to suspend operations.
The country’s vulnerability to these schemes is magnified by a gap in financial education. Data from a recent report shows that only 27% of Indian adults meet basic financial literacy standards, which is far below the global average of 42%. The situation is even more critical for millennials, where just 19% demonstrate adequate understanding despite expressing high confidence in their abilities.
In addition to large-scale hacks, there is a more insidious threat taking shape in the form of retail scams. We’ve seen a chartered accountant in Lucknow lose nearly $2.5 million to a fraudulent investment scheme that was spread through WhatsApp. In the same city, a calcenter was busted for duping over a thousand people through fake online work and betting apps.
Meanwhile, across the border in Pakistan, peer-to-peer (P2P) platform scams have surged. Innocent users find their bank accounts frozen after unknowingly receiving payments from compromised third-party accounts.
One Reddit user told a story of selling $630 worth of USDT, only to have the Federal Investigation Agency freeze their bank accounts. This was because the buyer used hacked money to pay for it.
Silicon Valley’s Reckless Mantra Has No Place in Finance
The “move fast and break things” Silicon Valley philosophy has proven to be not just unsuitable but fundamentally dangerous for the financial systems crypto platforms are building, especially in South Asia. When platforms prioritize aggressive growth over security, the “things” they break are not abstract lines of code; they are the savings and aspirations of real people.
In India, this has created a skeptical type of investor. While drawn to crypto’s high-return potential, Indian investors have received a trial-by-fire education from investment scams in WhatsApp and Telegram. As a result, the user base now demands tangible proof of security before making a financial commitment. They are no longer willing to trust marketing spin when their own communities are rife with stories of devastating losses.
In Pakistan, the stakes are often even higher. For many, crypto is a necessary hedge against severe currency devaluation and economic instability, not just a speculative venture. Users turn to assets like stablecoins to protect their life savings, placing a great deal of faith in the platforms that facilitate these transactions. When these people are targeted by fraudulent schemes, it doesn’t just erode trust in a single platform; it threatens a crucial financial lifeline.
User Expectations Have Changed Forever
Over the last decade, user expectations have changed a lot. Boasting about “institutional-grade security” on the landing page is no longer sufficient. Transparent security measures, verifiable reserves, and demonstrable protection funds are now minimum requirements rather than optional add-ons.
The Proof of Reserves concept was once a niche topic, but now it is a key part of user trust. Platforms that can cryptographically prove that they hold user assets in a 1:1 ratio are demonstrating a commitment to transparency that builds real confidence. In addition to showing that the fund exists, platforms need to give users the tools to verify those claims on their own.
Accountability Separates the Leaders from the Laggards
As the crypto ecosystem looks to the future, a clear divide is forming between platforms built on marketing promises and those grounded in accountability that is verifiable. The days when exchanges could thrive on flashy ads and empty promises are quickly coming to an end.
In response to a smarter and more skeptical user base, leading platforms are now expected to offer multi-layered security. For instance, exchanges like MEXC have adopted a triple-layer security model to address distinct user risks. This includes a transparent $100 million Guardian Fund to cover losses from platform breaches. It also features publicly auditable Proof of Reserves to ensure solvency and a dedicated Futures Insurance Fund to cushion futures traders from extreme market volatility. Meanwhile, to improve transparency and raise awareness about fair trading, MEXC released an updated version of its Risk Control Guidelines, accompanied by user education in affected regions and dedicated appeal procedures. It plans to launch a comprehensive global campaign focused on security, aimed at strengthening user protection, operational transparency, and community trust across the crypto sector.
In the end, this progression is all about building trust and real financial protection that lasts while avoiding losses. Platforms that step up and put money into security and openness will do well and help crypto reach its next level of maturity.
The future looks promising because it’s being built by users who know their worth and platforms willing to prove they truly care.
Petra Zhu is the South Asia Marketing Lead at MEXC