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Taiwan Crypto Industry Takes Positive Step with Government’s Approval for Self-Regulation Association

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Taiwan’s growing cryptocurrency sector has taken a significant step towards self-regulation with the government’s approval to form an industry association. This move comes amidst a period of increasing regulatory scrutiny in the country, and the association is expected to play a crucial role in shaping the future of crypto in Taiwan.

The approval was announced on Friday by the local crypto industry working group, signifying the succe­ssful culmination of initiatives that commenced in 2023. The working group consisting of 22 prominent crypto e­nterprises, including MaiCoin and BitoPro, rece­ntly underwent restructuring with the­ removal of ACE Exchange due to ongoing le­gal probes.

While Taiwan mandate­d anti-money laundering (AML) regulations for crypto se­rvice providers since July 2021, the­ broader crypto landscape remains large­ly unregulated. Howeve­r, the industry association’s formation signifies a proactive approach by digital assets firms. The­y aims to establish self-regulatory me­asures complementing e­xisting AML guidelines.

The Financial Supe­rvisory Commission introduced preliminary guideline­s in September 2023, e­mphasizing protecting consumer intere­sts within the digital assets sector. The­ association can capitalize on these dire­ctives to craft a robust framework for optimal practices, spanning domains like­ consumer protection, exchange­ operations, and anti-fraud measures.

Taiwan’s Crypto Regulatory Alliance Initiative

The formation of this association e­nables valuable collaborative prospe­cts between industry e­ntities and regulatory bodies. Foste­ring transparent communication channels and jointly formulating robust self-re­gulatory frameworks, the association can contribute to a more­ stable, sustainable virtual currencies landscape within Taiwan’s borde­rs.

Taiwan’s crypto regulatory frame­work, shaped by industry collaboration, has implications beyond its borders. As nations navigate­ intricate digital assets regulations, Taiwan’s methodology e­merges as an instructive e­xample, illuminating potential pathways for balanced ove­rsight and innovation.

The upcoming months will prove­ pivotal as the committee e­ndeavors to solidify the association’s framework and ope­rational mechanisms by the governme­nt-mandated June deadline­. This endeavour’s success hinges upon the­ association’s adeptness in advocating the multifarious inte­rests pervading the industry

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Warning Issued To Taiwanese Crypto Users Ahead Of Presidential Election

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With just a month left until the Taiwan presidential election, authorities caution residents against using cryptocurrency betting platforms to wager on the outcome. This advisory follows an ongoing investigation, with numerous individuals already summoned for questioning.

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Candidates & Cryptocurrency Caution

As the countdown to the Gulf presidential election officially commences, cryptocurrency users are urged to steer clear of illegal online gambling activities. Recent reports indicate that Taiwan’s investigation unit has been mobilized to monitor and address any illicit behavior that might impact the election.

The three major groups of presidential and vice-presidential candidates include Lai Xiaopei (Lai Qingde, Xiao Meiqin) of the Democratic Progressive Party, Hou Kangpei (Hou Youyi, Zhao Shaokang) of the Kuomintang, and Ke Yingpei (Ke Wenzhe, Wu Xinying) of the People’s Party. However, with election day near, cryptocurrency enthusiasts must exercise heightened vigilance to avoid becoming ensnared in unlawful online gambling pursuits.

Community members have reported the Bureau of Investigation making inquiries and conducting investigations. Taiwan’s presidential election has unwittingly become a focal point for the illegal decentralized gaming platform Polymarket. While some may perceive betting on predictions as part of an on-chain transaction, engaging in such activities concerning Taiwan’s elections poses significant legal risks.

Reports from the community suggest that individuals participating in Polymarket gambling have already been interviewed and investigated by prosecutors and investigators. Renowned cryptocurrency influencer Woody has also issued a stern warning, advising against participating in any predictions or gambling tied to the presidential election to evade potential arrests during this sensitive period.

Cryptocurrency users may find themselves violating Article 88-1 of the Election and Recall Act, regardless of the bet size. Such on-chain gambling behaviors could lead to imprisonment for up to six months, criminal detention, or fines not exceeding NT$100,000.

The community further emphasizes that transferring funds from centralized exchanges to relevant platforms allows inspection units to track cash flows. Readers and users are strongly advised to abstain from gambling activities that may contravene election and recall laws or other relevant legislation, particularly during the heightened sensitivity surrounding Taiwan’s elections.

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Taiwan’s JPEX Saga: 2 Arrests, Pop-Star Under Scrutiny

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In Taiwan, law enforcement authorities have apprehended two individuals associated with the beleaguered cryptocurrency exchange, JPEX. The detained persons are Chang Tung-Ying, the chief partner of JPEX’s Taiwan Office, and Shi Yu, a lecturer connected to the exchange. According to local reports, prosecutors have enlisted the local justice investigation bureau to conduct inquiries at nine locations and have subsequently summoned four suspects for questioning.

One of the suspects, surnamed Liu, was released on bail amounting to NT$50,000 [equivalent to $1,550], while another individual, surnamed Niu, was released after being interrogated. Reports indicate that JPEX commenced its promotion of cryptocurrency-related products and solicitation of investments in June. The precise scale and reach of JPEX’s operations in Taiwan remain uncertain, but local media outlets have reported that over ten victims affected by JPEX’s activities have filed lawsuits related to the case.

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Taiwan's JPEX Saga: 2 Arrests, Pop-Star Under Scrutiny 3

It is important to note that Taiwan has regulations in place requiring virtual asset service providers to adhere to anti-money laundering laws, a mandate introduced by the Financial Supervisory Commission in July 2021. However, JPEX failed to register with the FSC for anti-money laundering compliance.

JPEX, a trading platform based in Dubai, was compelled to cease its operations after the Hong Kong police received 2,538 reports linked to the scandal involving the exchange. In connection with this case, Hong Kong police arrested 28 individuals, including a prominent cryptocurrency influencer. As reported by TronWeekly, investors incurred losses amounting to approximately HK$1.56 billion.

Taiwan’s Popular Singer To Serve As Witness

What particularly drew attention in Taiwan was the involvement of popular singer-songwriter Chen Lingjiu, who was appointed as the spokesperson for JPEX’s Taiwanese office. This association garnered widespread attention globally.

Per the latest updates, the Taipei District Prosecutor’s Office interviewed Chen Lingjiu as a witness. Following the interrogation, he was allowed to return without being detained. Chen Lingjiu, in media interviews, stated, “Even if I received endorsement fees, my investment in this platform has exceeded the endorsement fees.” He disclosed that the asset loss amounted to about 15%. He emphasized that he had learned a valuable lesson and would exercise caution in future endorsements to avoid repeating similar mistakes.

Crypto Crackdown: Taiwan Busts $320M USDT Money Laundering Ring

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In a shocking revelation, the Electronic Investigation Team of the Criminal Bureau in Taiwan has unearthed the nation’s most extensive cryptocurrency money laundering operation, centering around a staggering 320 million USDT. At the heart of this intricate web of criminal activity is a merchant named Qiu, who is suspected of using virtual currency to facilitate money laundering across various Southeast Asian countries, including Hong Kong, the Philippines, and Malaysia.

This high-profile case first came to light when the investigators traced the victim’s stolen funds back to Qiu, who had been operating under the radar for quite some time. Qiu’s actions involved handling 320 million cryptocurrency in USDT coins since February the previous year, with a converted market value exceeding 10.4 billion yuan. This colossal sum represented the largest amount of money ever laundered by a single individual, capturing the attention of law enforcement agencies and the public alike.

Crypto Twist in Taishin Securities Scam

The investigation took an intriguing turn when the Second Team of the Electronic Investigation Bureau revisited a previous case involving a fake Taishin Securities mobile software fraud scheme. It was during this inquiry that they discovered the involvement of Qiu and his elaborate money laundering operation, which extended its reach to various fraudulent activities across borders.

The modus operandi employed by Qiu was intricate yet effective. After victims remitted their money to designated accounts, the funds were then funneled through a series of intermediary accounts, eventually ending up with Qiu. He would then convert the ill-gotten gains into cash, effectively concealing the flow of dirty money and achieving the objectives of the money laundering operation. Qiu would pocket 1% of the laundered money as profit, further fueling his illicit activities.

Moreover, Qiu’s frequent travels to countries like Hong Kong, the Philippines, and Malaysia, raised suspicions of connections with international gambling and fraud networks, adding a layer of complexity to the case.

The breakthrough in the investigation came when Qiu was apprehended upon his return to Taiwan in June, leading to the seizure of his mobile phone and an array of high-value assets, including luxury cars, expensive watches, and a substantial amount of cash. Subsequent digital evidence collection uncovered the vast scale of his cryptocurrency dealings, with a jaw-dropping 320 million TEDA coins handled since February the previous year.

In the wake of this revelation, the authorities continued to expand their probe, with multiple individuals implicated in the case facing charges of fraud and money laundering. This case has sent shockwaves throughout Taiwan and serves as a stark reminder of the growing importance of regulating and monitoring the cryptocurrency space to prevent such illicit activities in the future.

Taiwan Advances Crypto Regulation: Draft Crypto Act Clears First Hurdle – Report

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Taiwan has taken a significant step toward regulating the cryptocurrency industry as a draft crypto act passed its first reading at the Legislative Yuan, the nation’s parliament. The proposal, jointly put forth by Yung-Chang Chiang and 16 other lawmakers, is aimed at providing a legal framework for the virtual asset sector.

Yung-Chang Chiang, one of the proponents of the special act, expressed his optimism about the progress. He noted that “after the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage.” Chiang also called upon the Financial Supervisory Commission (FSC) to contribute their draft bill to facilitate consensus-building among various sectors of society.

This move comes in the wake of guidelines issued by Taiwan’s FSC, encouraging the industry to establish self-supervisory rules through a potential industry association. However, Chiang highlighted the limitations of such voluntary measures, explaining that the special law would empower regulatory authorities to impose penalties on operators who violate self-regulation rules.

The proposed crypto law will mandate all cryptocurrency platforms operating in Taiwan to seek a permit. Failure to do so could lead to regulators ordering the cessation of their operations. While no specific timeline has been set for the second reading of the bill, it’s unlikely to occur by the end of January 2024, given that the current legislative tenure in Taiwan ends in January.

Presently, Taiwan’s cryptocurrency industry remains largely unregulated, with anti-money laundering compliance being the primary requirement for virtual asset service providers, introduced by the FSC in July 2021.

Circle’s Innovative ‘Points-to-Crypto’ Service

In related news, United States-based stablecoin issuer Circle has formed a partnership with Taiwan’s second-largest convenience store chain, FamilyMart, and a local crypto exchange, BitoGroup. This collaboration aims to introduce a “Points-to-Crypto” service on the FamilyMart app, allowing customers to convert loyalty points into a Circle-issued USD Coin.

This move is expected to democratize access to cryptocurrencies, leveraging the popularity of loyalty point systems in Taiwan, where a large percentage of users engage in point accumulation and redemptions.FamilyMart’s FamiPoints and BitoGroup’s user base are set to play a significant role in this initiative, offering millions of potential users the opportunity to engage with digital assets.

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Binance Aims for AML Compliance in Taiwan: Registration Process Underway

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The world’s largest cryptocurrency exchange, Binance, is in the process of seeking registration according to Taiwan’s Money Laundering Control Act, which currently constitutes the sole set of cryptocurrency-related regulations formulated by local authorities.

During a private meeting held on Tuesday, the Financial Supervisory Commission (FSC) of Taiwan communicated to numerous domestic crypto service providers in attendance that this exchange has initiated the procedure to obtain registration for the purpose of adhering to anti-money laundering protocols. This information comes from two individuals familiar with the situation.

Taiwan has mandated that providers of virtual asset services (VASPs) must conform to its anti-money laundering regulations since the FSC introduced these rules in July 2021. In the absence of such compliance, the cryptocurrency industry in the country remains largely unregulated.

The Block’s request for a comment was not promptly addressed by Binance.

During a telephone conversation on Friday with The Block, an official from the FSC declined to provide a statement regarding whether Binance had submitted the required documentation for registration with the regulatory body. However, the official emphasized that offshore cryptocurrency platforms operating within Taiwan are strongly encouraged to adhere to the local anti-money laundering regulations.

While this exchange remains unregulated within Taiwan, the exchange has established a local entity known as “Binance International Limited Taiwan Branch (Seychelles),” as indicated in the Department of Commerce’s records. The information related to registration disclosed that the government granted approval for Binance’s company registration on May 12, 2023, with a registered capital amounting to NT$30 million ($944,000) in Taiwan.

Binance’s Local Operations in Taiwan

Binance has taken proactive steps in collaborating with local law enforcement agencies in Taiwan to combat cybercrime. In June, Binance announced its partnership with Taiwan’s Criminal Investigation Bureau, working together to impart their expertise in addressing crimes associated with digital assets to over 200 law enforcement officers in Taiwan.

Damien Ho, who serves as Binance’s Head of Global Partnerships, emphasized the significance of ensuring the safety and comfort of users within the cryptocurrency ecosystem, especially as the interest in cryptocurrencies grows among people in Taiwan. This sentiment was conveyed in a blog post made in June.

Binance’s active expansion across Asia is noteworthy. In recent times, the exchange successfully launched operations in Japan, having acquired the local exchange Sakura Exchange BitCoin in November 2022. This strategic move not only marked its official entry into the Japanese market but also paved the way for regulatory oversight by the Japan Financial Services Agency.