Scammed at Your Doorstep! Taiwan’s New Frontline of Fraud: “Doorstep Currency Exchange”, Making It Harder to Prevent
Virtual currency fraud has become a major focus for law enforcement and financial regulatory agencies. However, fraudsters are becoming increasingly cunning, making “home currency dealers” a new challenge for financial security in 2024. With the escalation of criminal methods, Taiwan’s Financial Supervisory Commission and Criminal Investigation Bureau have begun to work together to protect the public from this new type of fraud.
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Actively regulating personal currency dealers: Compliance statements required for more than three transactions
Increase in virtual currency fraud cases: Accounting for over 10% of all fraud cases
Taiwan’s new front in fraud: “Home currency dealers”
Fraudulent home services that come to your doorstep
Taiwan’s fraud prevention efforts double from last year, but still only the tip of the iceberg
Challenging investigation: Disrupting cryptocurrency money flow
In this battle against fraud, the Financial Supervisory Commission has taken unprecedented measures by including individual currency dealers in the regulatory framework. According to the latest regulations, any individual currency dealer who processes more than three digital currency transactions must make compliance statements, report anti-money laundering activities, and fulfill tax obligations. This policy expands the scope of supervision beyond corporate entities to encompass individual currency dealers.
Financial institutions citing statistics from the Criminal Investigation Bureau point out that crime cases related to “digital currency” have accounted for over 10% of all fraud cases.
In 2023, as funding transfer methods diversified, criminal organizations turned to providing “home services,” especially the “home currency dealer” model, which converts victims’ cash into virtual currency through a specially developed app for illegal transactions.
The Criminal Investigation Bureau reveals that “home services” mainly include “collecting money at home” and “home currency dealers.” Among them, “home currency dealers” are specifically designed apps for fraud groups to directly operate victims’ mobile phones for virtual currency transactions. Initially, fraud groups entice victims to invest small amounts for modest profits. Once the investment amount increases, they withdraw all funds in one go.
According to the latest statistics before the Lunar New Year, in 2023, cooperation between the police and banks successfully prevented fraud cases amounting to 8.989 billion NT dollars, which is twice the amount prevented throughout 2022. Although this achievement is significant, the continuous evolution of fraudulent methods means that challenges still exist. The use of “home services” by fraud groups makes their activities more concealed and difficult to trace.
One of the biggest challenges in investigating fraud crimes related to virtual currency is the existence of over-the-counter (OTC) transactions, which provide fraud groups with hidden money flow breakpoints. The most common method is to convert funds into Bitcoin or other virtual currencies through cash transactions with currency dealers and then transfer them to members of the fraud group.
With the continuous advancement of financial technology, the battlefield against fraud is constantly changing. In 2024, “home currency dealers” have become a new focus, highlighting the challenges faced by financial security in the digital age. Government agencies, financial institutions, and the public must remain vigilant and cooperate to protect their own and others’ property.
Home services OTC
Over-the-counter transactions
Fraud
