Taiwan’s Financial Regulator to Conduct Limited Oversight of Cryptocurrencies

The Financial Supervisory Commission of Taiwan has indicated its intentions to maintain only a limited oversight of cryptocurrencies. The regulator said it’s going to focus mainly on the enforcement of anti-money laundering policies, while remaining open towards innovations like those coming from the crypto sector.

The Financial Supervisory Commission of Taiwan has indicated its intentions to maintain only a limited oversight of cryptocurrencies. The regulator said it’s going to focus mainly on the enforcement of anti-money laundering policies, while remaining open towards innovations like those coming from the crypto sector.

Also read: Bitcoin Businesses Denied Banking Services in Ireland

Not Stifling Innovation

The Financial Supervisory Commission of Taiwan has indicated its intentions to maintain only a limited oversight of cryptocurrencies. The regulator said it’s going to focus mainly on the enforcement of anti-money laundering policies, while remaining open towards innovations like those coming from the crypto sector.With the executive power in Taipei still mulling over new regulations for cryptocurrencies and initial coin offerings (ICOs), representatives of Taiwan’s financial regulator indicated their unwillingness to slow down progress in the fintech industry. The Financial Supervisory Commission (FSC) will mainly focus on one of its core duties – overseeing the enforcement of anti-money laundering policies, and will continue to welcome innovations that come with digital currencies.

During a press conference on Thursday, Banking Bureau Deputy Director Sherri Chuang said the FSC prefers to monitor developments and avoid stifling early-stage growth. Quoted by The Taipei Times, she emphasized:

The commission maintains an open stance and welcomes all industry innovations.

Chuang also noted that cryptocurrencies, and the tokens issued through ICOs, which are classified as commodities at this stage, do not currently fall under the commission’s jurisdiction. The regulator is only involved in preventing money laundering through virtual assets, the official reiterated before the media. Sherri Chuang compared the situation with that of the lease finance companies, where the involvement of the regulator is also limited to money laundering prevention.

The Financial Supervisory Commission of Taiwan has indicated its intentions to maintain only a limited oversight of cryptocurrencies. The regulator said it’s going to focus mainly on the enforcement of anti-money laundering policies, while remaining open towards innovations like those coming from the crypto sector.According to another representative of the commission, Securities and Futures Bureau Chief Secretary Chien Hung-ming, ICOs do not cross any regulatory red lines in Taiwan. He explained that each coin offering would be assessed on a case-by-case basis, noting that regulators are primarily concerned with examining the fundraising prospects of the respective token sale.

The FSC will assess each issuance to determine if the digital coin should be classified as a security or a virtual commodity, Chien added. “It is very difficult to define broadly, as each case is different,” the FSC official pointed out.

Not Following China

The Executive Yuan, or the Taiwanese government, has yet to develop and adopt comprehensive regulations for cryptocurrencies and initial coin offerings. In April, high-ranking officials indicated that the respective legislative framework should be developed and introduced by November, 2018, as news.Bitcoin.com reported.

According to a statement by Taiwan’s Justice Minister, Qiu Taisan, the government intends to task the FSC with developing the regulatory system for digital currencies. The Ministry of the Interior, the Investigation Bureau, and the Central Bank of the Republic of China (Taiwan) are expected to assist the commission.

The Financial Supervisory Commission of Taiwan has indicated its intentions to maintain only a limited oversight of cryptocurrencies. The regulator said it’s going to focus mainly on the enforcement of anti-money laundering policies, while remaining open towards innovations like those coming from the crypto sector.

Although cryptocurrencies like bitcoin have been increasingly mentioned as a subject of concern, mainly in the light of money laundering, Taiwan is not likely to severely restrict them. Last year the chairman of the FSC, Wellington Koo, confirmed that the country would not adopt a prohibitive regulatory framework like the one implemented in China.

Earlier in April, Taiwan’s Central Bank signaled it would favor regulating cryptocurrencies under the country’s existing anti-money laundering laws. Its new governor, Yang Chin-long, suggested that the Ministry of Justice should include bitcoin in the scope of ROC’s Money Laundering Control Act.

Do you expect Taiwan to eventually adopt crypto-friendly regulations? Share your thoughts on the subject in the comments section below.  


Images courtesy of Shutterstock.


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Japan Penalizes Crypto Exchanges – Yakuza Involvement Confirmed

Japan Penalizes Crypto Exchanges - Yakuza Involvement Confirmed

The Japanese regulator has issued business improvement orders to six of the country’s 16 fully-licensed crypto exchanges including Bitflyer, Quoine, and Tech Bureau. The agency confirmed to news.Bitcoin.com that at least one of the six exchanges has some form of involvement with the Yakuza. Responding to the improvement order, Bitflyer has halted new account registrations.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Punishing 6 Regulated Exchanges

Japan Penalizes Crypto Exchanges - Yakuza Involvement ConfirmedJapan’s top financial regulator, the Financial Services Agency (FSA), issued six new business improvement orders on Friday, June 22. The orders to Bitflyer, Tech Bureau, Bitpoint Japan, Btcbox, Bitbank, and Quoine follow the agency’s first rejection of a crypto exchange registration on June 7.

Bitflyer, Japan’s largest crypto exchange by volume, received an “administrative penalty” order. The agency said that after an inspection, “an effective management system has not been established to ensure proper and reliable operation of the business, as well as countermeasures against money laundering and terrorist financing.” The exchange must submit a written report to the agency by July 23. The regulator elaborated:

Management has not established an internal control system including an internal audit, giving priority to reducing costs.

The other five crypto exchanges received similar orders. Japan currently has 16 fully-licensed exchanges. Previously, the only regulated exchanges to receive business improvement orders from the FSA were Tech Bureau which operates Zaif exchange and GMO Coin. Today’s order is the second Tech Bureau has received.

Bitflyer Halts New Account Registrations

Japan Penalizes Six Cryptocurrency Exchanges - Yakuza Involvement ConfirmedResponding to the FSA’s orders, Bitflyer apologized to its customers and outlined plans to comply with the agency. In order to “promptly build a proper identity management system for existing customers, we have decided to re-check the status of approval,” the exchange wrote, adding:

If defects and deficiencies are confirmed within a customer’s registration information by any chance, it will be necessary to re-implement the person’s confirmation process. Therefore, in some cases, we ask visitors to re-present their identity confirmation documents, so we are sorry for any inconvenience.

“In addition, we have reexamined the status of identity confirmation of existing customers, and the internal control system. Until reinforcement is in place, [we will] voluntarily suspend account creation by new customers,” Bitflyer emphasized.

Organized Crime Involvement

In an interview with a news.Bitcoin.com reporter in Tokyo, the FSA confirmed that at least one of the six crypto exchanges above was found to have some kind of involvement with organized crime groups, particularly the Yakuza. Without naming the guilty crypto exchanges, a spokesman for the agency told a crowd of reporters:

The FSA found that some companies do not have an updated database for screening the individuals who sign up…We strongly recommend those companies to remove all ties with anti-social forces [organized crime groups].

As the crypto industry grows in Japan, the FSA pointed out the necessity for exchanges to work with the local authorities to create an increasingly secure environment with proper monitoring systems, including screening users identification.

What do you think of the FSA’s action and Yakuza’s involvement with crypto exchanges? Let us know in the comments section below.


Images courtesy of Shutterstock, Nikkei, Firstlogic, and Pixabay.

Editor’s Note: Nathalie Stucky contributed to this article. Some statements have been translated from Japanese.


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Korean Government Launches Investigation into Crypto Hacks

Korean Government Launches Investigation into Crypto Hacks

Following the alleged hacks of South Korean crypto exchanges, the government has formally launched an investigation into the cause of the hacks. The authorities will also perform security checks on all crypto exchanges’ systems.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Government’s Response

Korean Government Launches Investigation into Crypto HacksThe South Korean government announced on Wednesday, June 20, that it has formally launched an investigation into the cause of the alleged security breaches at two crypto exchanges, Bithumb and Coinrail. At the time of this writing, Bithumb is the country’s second-largest crypto exchange by volume, behind only the Kakao Corp-backed Upbit, according to Coinmarketcap. Coinrail is the country’s seventh largest crypto exchange.

The government’s notice states:

The Ministry of Science and Information and Communication Technology (hereinafter referred to as ‘Science and Technology Ministry’) and the Korea Internet & Security Agency (KISA) said that they are investigating the cause of the accident caused by the virtual currency leak that occurred in Coinrail and Bithumb.

So far, the authorities have not confirmed that the two exchanges were hacked. Coinrail announced on June 10 that it was hacked with an estimated loss of approximately $40 million. Just 10 days later, on June 19, Bithumb revealed that approximately $31 million worth of its cryptocurrencies was stolen.

Investigating Security Breaches

In its announcement, the Korean government explained:

As soon as a company reports a hacking incident, a KISA accident investigation worker is quickly on the scene and is investigating. In cooperation with the police, the agency will analyze and respond to the cause of the accident.

Korean Government Launches Investigation into Crypto HacksThe Science and Technology Ministry inspected the level of information security of 21 cryptocurrency exchanges from January to March this year. After discovering that “most companies have security weaknesses,” the ministry suggested some additional measures aimed at boosting the exchanges’ security systems.

According to the ministry, 17 companies had a “system access control deficiency” while 16 had “insufficient network isolation.” 17 were found to have “abnormality” in their “monitoring system” and 18 had poor security management of crypto wallets and cryptographic keys. Furthermore, 10 companies needed “crypto security management” and 12 companies had inadequate firewall and security systems.

Korean Government Launches Investigation into Crypto HacksWhile the authority confirmed that Coinrail has not implemented additional measures, Bithumb said during the investigation process that it “plans to check the implementation of the recommendations for complementary measures,” the government described.

The ministry says it will encourage the 21 crypto exchanges that were inspected to implement additional measures by the end of the month and will review their security measures again afterwards, reiterating:

We plan to check whether the improvement measures for security vulnerabilities have been completed.

Furthermore, all newly identified crypto exchanges will also be inspected, the ministry informed, clarifying that upon confirmation of a new crypto dealer, security checks will be conducted.

What do you think of the Korean government launching an investigation into the cause of the alleged hacks? Let us know in the comments section below.


Images courtesy of Shutterstock and Pixabay. Editor’s Note: Some statements have been translated from Korean.


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At Least $20 Billion in Crypto Investment Awaits Custody Streamlining, Approval

At Least $20 Billion in Crypto Investment Awaits Custody Streamlining, Approval

Rumor has it vaunted, long awaited institutional money, big investment in crypto is coming. One of the many holdups involves custody regulation, as both large funds and those ecosystem companies best poised look for a smooth way to guard cryptocurrency holdings securely, alleviating whales’ greatest fears: theft and loss.

Also read: Troll Slayer: Derek Magill Defends Peer-to-Peer Electronic Cash Against Defamation

Investment Whales Want Custody Assurance

“There are a lot of investors where custodianship was the final barrier. Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital,” hedge fund Multicoin Capital’s Kyle Samani told Olga Kharif and Sonali Basak by phone.

Custodial arrangements in traditional, legacy finance are well understood and regarded. Precious metals, diamonds, and even cash are carefully guarded by trusted institutions such as JP Morgan. The brave new world of cryptocurrency scares the hair off of big finance, so a regulated, risk averse arrangement, complete with liability insurance, is, some professionals feel, key to big money entering the space in a substantial way.

At Least $20 Billion in Crypto Investment Awaits Custody Streamlining, Approval

Popular ecosystem bank, Coinbase, is among those who’ve announced movement in this area. As these pages reported last month, it “announced a new suite of services meant to attract more big money players such as the many new crypto hedge funds that pop up all the time. It will launch a cryptocurrency custodian in partnership with an SEC-regulated broker-dealer to a group of initial clients that include 1confirmation, Autonomous Partners, Boost VC, Meta Stable, Multicoin Capital, Polychain Capital, Scalar Capital and Walden Bridge Capital.”

About the same time, Tokyo-based investment bank Nomura announced its new venture, Komainu. It was “established to help overcome barriers for institutional investment in crypto-assets with a custody solution and offering new services, standards and best practices.” Jez Mohideen of Nomura explained, “Global investment managers have long been held back from full participation in digital asset markets, limited by operational and regulatory risk. Our new partnership will set the required standards that will bring peace of mind to digital asset investors, and provide tools and products to enable better integration with more traditional investment vehicles such as mutual funds.”

When Lambo?

Coinbase estimates $20 billion worth of crypto is sidelined until custody solutions make sense. Crypto assets will flow into custody services once they’re available, estimates Sam McIngvale, who’s leading Coinbase’s project — and that number is probably considerably higher with the ubiquity of initial coin offers, for example. At Least $20 Billion in Crypto Investment Awaits Custody Streamlining, Approval

“Such projects would pave the way for vast tracts of investors to expand into crypto,” Bloomberg claims, “potentially reviving prices in markets that have tumbled in recent weeks. Regulated crypto custody would allow more institutional buyers — such as hedge funds and pensions — to invest in Bitcoin, Ether and a multitude of other coins. Retail brokerages would have a safer way to let clients add crypto to portfolios stuffed with stocks and bonds.”

Regulatory clarity in this area seems to also be paramount for future growth in professional circles. Literally hundreds of funds have popped up in recent years, touting crypto toe-dips of one kind or another, and managers worry the, at times trigger happy, US Securities and Exchange Commission could very well fire first with prosecutions, asking questions later. Coinbases of the world, pending formal approval, would go a long way toward easing those concerns.

Do you expect major institutional money to enter the crypto market soon? Let us know in the comments. 


Images via the Pixabay.


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License Needed for Crypto Trading, Circulation, and Settlement in Cambodia

License Needed for Crypto Trading, Circulation, and Settlement in Cambodia

Three Cambodian government bodies have jointly announced that the propagation, circulation, buying, selling, trading, and settlement of cryptocurrencies without obtaining a license are illegal activities. The agencies have also outlined four main risks associated with crypto trading or investing.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

License Needed

The National Bank of Cambodia (NBC), the Commission of Cambodia, and the General-Commissariat of National Police jointly made a statement regarding the legality of crypto activities in the country. It was signed on May 11 but published on Tuesday, June 19.

License Needed for Crypto Trading, Circulation, and Settlement in Cambodia

“Competent authorities have recently observed that cryptocurrencies such as Kh Coin, Suncoin, K Coin, Onecoin, Forex coin and other similar cryptocurrencies have been propagated, circulated, bought, sold, traded and settled actively in Cambodia,” the trio wrote, adding:

Competent authorities clarify that the propagation, circulation, buying, selling, trading and settlement of cryptocurrencies without obtaining license from competent authorities are illegal activities.

The authorities emphasized that “Any person or legal entity” engaged in any of the above activities without a proper license “shall be penalized in accordance with applicable laws.” However, the statement does not mention bitcoin or any crypto with a large market cap.

Regulators Outline Crypto-Related Risks

The statement continues to explain that the aforementioned crypto-related activities are not regulated by the authorities and “will cause potential risks to the public and society.”

License Needed for Crypto Trading, Circulation, and Settlement in CambodiaThe trio named four specific risks. Firstly, “The issuance of cryptocurrencies is not backed by collateral,” they wrote. Secondly, “Investment in cryptocurrencies may incur losses due to the volatility of its face value.” Then they claim there is a risk of “cybercrime and loss of funds due to the system being hacked.” Lastly, not only is there “no customer protection mechanism” with cryptocurrencies, but the regulators also noted the risks of money laundering and financing of terrorism since “the user of cryptocurrencies is an anonymous person who has no identity or historical records.”

License Needed for Crypto Trading, Circulation, and Settlement in CambodiaThe Cambodian Securities and Exchange Commission previously warned citizens of the risks of trading or investing in cryptocurrencies. In December, the NBC “reconfirmed its stand not to recognize digital currency bitcoin being introduced by some businesses in Cambodia,” the national press agency, AKP, wrote.

The central bank released a resolution in December to all banks and microfinance institutions in the country to ban the trading of cryptocurrencies including bitcoin, the Phnom Penh Post described, adding that, as a result:

Many of these financial institutions prevent customers from using their accounts to buy or sell digital coins or tokens.

What do you think of this statement by the three government bodies? Let us know in the comments section below.


Images courtesy of Shutterstock and the Cambodian government.


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