BitAsset Exchange Under Investigation for Mainland Chinese Investment Issue Latest Response from BitAsset and Association
Since 2018, Chinese companies have been setting up virtual currency trading platforms in Taiwan, such as BitAsset, without proper licensing, which has attracted high attention from Taiwan’s judicial department. Recently, the Taipei District Prosecutors Office conducted a large-scale search and investigation on the relevant companies and interviewed and dealt with the responsible individuals.
Despite their anti-money laundering declarations, Taiwan’s VASP operators have encountered consecutive incidents. BITGIN, a subsidiary of Xinpai Media Group, was involved in the 88 Mansion money laundering case, while ACE, a subsidiary of Ace Digital Innovation, was involved in an air coin fraud case. Now, the Asia Pacific Yiant Technology Co., Ltd., registered by BitAsset, is also under investigation due to issues related to mainland Chinese capital.
Background of Asia Pacific Yiant Company
Hidden Mainland Chinese Capital Background
Search and Investigation Action
Results of Responsible Individuals Handling
Difficulty in Investigating Taiwanese Currency Circle Companies Involved with Mainland Chinese Capital
BitAsset’s Response: Individuals involved are not current responsible individuals
VASP Association: Actively cooperating with regulation, only admitting members based on anti-money laundering lists
Since 2018, Asia Pacific Blockchain, a subsidiary of Xinpai Media Group, has established “Asia Pacific Yiant 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.
In order to conceal the mainland Chinese capital background of his company, the responsible person of Asia Pacific Yiant Company, Hu Zhilong, engaged in business activities such as soliciting people to use the platform for virtual currency trading in Taiwan without formal approval from the regulatory authorities. This behavior violates relevant laws in Taiwan.
The Taipei District Prosecutors Office and the Taipei City Investigation Division jointly conducted searches at eight locations related to Asia Pacific Yiant Company yesterday. This action is based on Article 40-1, paragraph 1 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, and initiated an investigation against Hu Zhilong and others.
After questioning, the Taipei District Prosecutors Office decided to allow the responsible person of Asia Pacific Yiant Company, Hu Zhilong, to be released on bail of 200,000 New Taiwan Dollars. In addition, three former company executives related to the case were asked to leave and no further legal measures have been taken for now.
This incident has aroused high attention from society regarding the regulation of cross-border virtual currency trading platforms. With the rapid development of the virtual currency market, how to effectively regulate and prevent related legal risks has become a common concern of the Taiwanese government and the public.
In fact, media, incubators, exchanges, and venture capital companies in the Taiwanese currency circle have been heard to have mainland Chinese capital components due to the easy transferability of virtual currencies. This investigation against BitAsset, based on VASP (Virtual Asset Service Provider) being the current main regulatory focus, also reveals this phenomenon.
Asia Pacific Yiant Company stated through a lawyer’s statement that the current responsible person, Guo Hongze, reached an agreement with the former responsible person, Guo Bocun, to acquire all the capital contributions on November 9, 2023, under notarization. The company has changed three different responsible persons, and Hu Zhilong mentioned in the case is the first responsible person. After Guo Hongze took over, there has been no cooperation or contact with Xinpai Media Group. Whether the first responsible person is involved with mainland Chinese capital is still under investigation.
In response to the search of VASP Association members today, the VASP Association stated that it will continue to pay close attention to the investigation and actions of the judicial authorities regarding the relevant cases and maintain close communication with the regulatory authorities.
The association was established in accordance with the guiding principles issued by the Financial Supervisory Commission, and any operator who has completed the anti-money laundering compliance declaration is eligible to apply for membership. The association admits members based on the anti-money laundering list and does not have any other screening or dismissal authority.
After implementing anti-money laundering measures, operators must also cooperate with financial inspections. According to a report by the Chairman of the Financial Supervisory Commission, Peng Jinlong, in the Legislative Yuan, future VASP operators will have clear definitions 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 regulatory authorities and continues to monitor the development of the events.
BitAsset
Taiwan
Mainland Chinese capital
Further Reading
Industry Opinions: Importance of Stablecoin Regulation, Future of Taiwan Dollar Stablecoin
Peng Jinlong’s Three Waves of New Policies at the Financial Supervisory Commission: Promoting Asia’s Asset Management Center and Light Sandbox
