Investigation Launched into VASP Operator BitAsset Exchange Under Investigation Due to Mainland Capital Issue Latest Responses from BitAsset and Association
Since 2018, Chinese companies have been setting up virtual currency trading platforms in Taiwan without proper licenses, causing high concern from Taiwan’s judicial department. Recently, the Taipei District Prosecutors Office conducted a large-scale search and investigation of the relevant companies, and interviewed and dealt with the responsible individuals.
Taiwan’s VASP operators
Despite their anti-money laundering declarations, they have encountered consecutive incidents. After all, BITGIN Technology Co., Ltd. was involved in the 88 Guan money laundering case, and ACE Digital Innovation Co., Ltd. was involved in the aircoin fraud case. Now, Asia Pacific Yian Technology Co., Ltd., registered by BitAsset, is also being investigated due to issues related to mainland investment.
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Background of Asia Pacific Yian Technology Co., Ltd.
Hidden mainland investment background
Search and investigation operation
Outcome of responsible individuals
Difficulty in investigating Taiwanese currency circle companies involved in mainland investment
BitAsset’s response: The individuals involved are not current responsible personnel
VASP Association: Actively cooperating with regulation, only accepting members based on anti-money laundering list
Since 2018, “Xin Pai Blockchain,” a company under the Chinese mainland Xin Pai Media Group, has set up “Asia Pacific Yian Technology Co., Ltd.” in Taiwan without approval from the Taiwan Investment Commission. This company mainly operates the “BitAsset” virtual currency trading platform, aiming to provide virtual currency trading services to users in the Asia-Pacific region.
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Asia Pacific Yian Technology Co., Ltd.’s responsible person, Hu Zhilong, engaged in business activities such as soliciting the public to use the platform for virtual currency trading without formal approval from the competent authority in order to conceal the mainland investment background of his company. This behavior violates relevant laws in Taiwan.
The Taipei District Prosecutors Office and Taipei City Investigation Office joined forces to conduct searches at eight locations related to Asia Pacific Yian Technology Co., Ltd. yesterday. This operation was carried out based on Article 40-1, Paragraph 1 of the “Act Governing Relations Between the People of Taiwan Area and the People of the Mainland Area,” and an investigation was launched against Hu Zhilong and others.
After questioning, the Taipei District Prosecutors Office decided to allow Hu Zhilong, the responsible person of Asia Pacific Yian Technology Co., Ltd., to be released on a bail of NT$200,000. In addition, the three former responsible persons related to the case were asked to return and no further legal measures have been taken at this time.
This incident has raised high concerns in society regarding the regulation of cross-border virtual currency trading platforms. With the rapid development of the virtual currency market, effectively regulating and preventing related legal risks has become a common concern for the Taiwanese government and the public.
In fact, the media, incubators, exchanges, and venture capital companies in the Taiwanese currency circle often have mainland investment components due to the easy transferability of virtual currencies. This investigation into BitAsset, based on VASP (Virtual Asset Service Provider) being the current regulatory focus, also reveals this phenomenon.
Asia Pacific Yian Technology Co., Ltd. issued a statement through its lawyer, stating that the current responsible person, Guo Hongze, reached an agreement with the former responsible person, Guo Bocun, on November 9, 2023, after being notarized by a notary public, to acquire all the capital contributions. The company has changed responsible persons three times, and Hu Zhilong mentioned in the case is the first responsible person. Since Guo Hongze took over, there has been no cooperation or dealings with Xin Pai Group. Investigation is still ongoing regarding whether the first responsible person is involved in mainland investment.
Regarding the incident where VASP Association members were searched today, the VASP Association stated that they will continue to monitor the investigation and actions of the judicial authorities on the related cases and maintain close communication with the competent authority.
The association was established based on the guiding principles issued by the Financial Supervisory Commission, and any operator that has complied with anti-money laundering regulations is eligible to apply for membership. The association includes members based on the anti-money laundering list without any other screening or exclusion rights and responsibilities.
After passing the anti-money laundering measures, operators also need to cooperate with financial inspections. According to a report by the Chairman of the Financial Supervisory Commission, Peng Kuan-lung, to the Legislative Yuan, VASP operators will have a clear definition in the future and will transition from a reporting system to a registration system, and operators involved in illegal activities will also bear criminal responsibility.
The association has always maintained smooth communication with the competent authority and continues to monitor the development of the incident.
BitAsset
Taiwan
Mainland investment
Further Reading
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