Taiwan Mobile TWEX Forum Discussion on Joint Prevention and Fraud Combat with the Investigation Bureau, Fubon Bank, and VASP Association

Bitcoin Pizza Day Forum Held on May 22

On Bitcoin Pizza Day (May 22), a forum co-hosted by Fuhsing Digital Co., Ltd. and the Taiwan Fintech Association featured a seminar titled “Joint Prevention and Fraud Prevention: New Strategies for Cross-Industry Cooperation,” moderated by Secretary-General Zheng Xuefeng of the Fintech Association. Experts from various fields gathered to discuss the challenges and compliance requirements related to virtual assets.

Guests included Zheng Guangtai, Chairman of the Taiwan Virtual Currency Business Association; Hsu Junzhang, Section Chief of the Money Laundering Prevention Division of the Ministry of Justice Investigation Bureau; and Cai Peiling, Deputy General Manager of the Financial Security Department at Taipei Fubon Bank. They shared their views and recommendations on joint fraud prevention from the perspectives of industry, government, and financial institutions.

Investigation Bureau Admits: Cryptocurrency Has Become an Important Tool for Money Laundering

Hsu Junzhang particularly mentioned “Bixiang” as a case study during the forum. He pointed out that the unique nature of virtual assets makes them a significant tool for criminals to launder money. For instance, some investors, when conducting cash transactions with Bixiang, have their received cash deposited into the accounts of a security company, which then transfers the funds to another company that uses them to purchase virtual currency at other exchanges. This method of fund movement not only increases tracking difficulty but also highlights the inadequacies of the current regulatory mechanisms.

He emphasized that operators should invest resources in researching “money laundering patterns” and proactively report any suspicious fund flows to the Ministry of Justice’s Money Laundering Prevention Division to assist law enforcement in further clarifying criminal patterns.

Fubon Bank Spells Out the Dilemma of Cryptocurrency: Business Needs vs. Risk Control

As a crucial part of the financial system, banks face the dual challenge of meeting market demand while managing potential risks when dealing with virtual asset businesses. Cai Peiling pointed out that banks encounter two major challenges when handling virtual asset-related businesses:

1. The business demand, such as how to evaluate customers who possess virtual assets but lack traditional financial proof;
2. Risk control, particularly highlighted by international events like the Russo-Ukrainian War, which has intensified concerns over the security of payment systems.

Moreover, transactions involving large sums of money entering and exiting accounts within a short period also require banks to be more vigilant about potential money laundering risks.

Regarding the cooperation between banks and Virtual Asset Service Providers (VASP), Cai Peiling admitted that issues such as privacy disputes and technological resource gaps still exist. She believes that establishing a joint prevention mechanism requires clear regulatory support and calls on the government to expedite clarifying relevant regulations to enable operators to advance cooperation on a legal and compliant basis.

VASP Association President: Calls for Joint Prevention Among Operators and Financial Institutions

Zheng Guangtai emphasized the importance of self-regulation from the operators’ perspective. He pointed out that virtual asset operators should actively interpret regulations and establish internal self-regulatory standards to ensure that their operations comply with regulatory requirements. He also mentioned the potential role of smart contracts in crime prevention, suggesting that operators could enhance the transparency and security of transactions through technological means.

Additionally, Zheng Guangtai noted that the development of virtual assets requires not only the efforts of operators but also close cooperation with financial institutions such as banks. He urged operators and financial institutions to jointly invest resources in researching money laundering patterns and establishing effective joint prevention mechanisms to further reduce crime risks and promote healthy market development.

What Are the Key Factors for Cooperation Between VASP Operators and Regulations?

At the end of the forum, experts unanimously agreed that the key to joint fraud prevention lies in cross-industry cooperation and improved regulations. Hsu Junzhang stated that if virtual asset operators can effectively manage internal controls and maintain close cooperation with the government and financial institutions in the future, they will not only reduce crime risks but also gain more market trust. Cai Peiling added that the success of a joint prevention mechanism requires clear regulations and transparent information sharing, urging the government to accelerate the formulation of relevant policies to provide operators with clear guidance.

Risk Warning

Investing in cryptocurrencies involves high risks, and prices may fluctuate dramatically, potentially resulting in the loss of your entire principal. Please assess risks cautiously.