Taiwanese cryptocurrency exchange Bitgin is currently under investigation by the country’s police force for alleged money laundering. The firm’s chief operating officer, Yuting Zhang, was arrested by Taiwanese police in connection with the “Eighty-Eight Guild Hall” money laundering incident, according to local news reports.
Accusations of Multibillion-Dollar Money Laundering Scheme
Two local businessmen, Zhemin Guo and Chengwen Tu, were previously accused by police of operating a multibillion-dollar money laundering scheme. The scheme allegedly involved using their foreign exchange offices and crypto exchange accounts to launder proceeds of crime obtained via wire fraud from overseas. Tu is also accused of defrauding the country’s tax authorities by claiming fraudulent export tax refunds through the overseas sale of video game credits.
No Official Licensing Regime for Cryptocurrency Exchanges
Taiwan currently does not have an official licensing regime for cryptocurrency exchanges. In September, Bitgin and other industry peers established the Virtual Asset Service Provider Preparatory Office to engage in self-regulation and lobbying of political officials. Yuling Tsai, general counsel of the Taiwan VASP Association, commented on the incident, stating that the preparatory group held a meeting and issued a public response. The members involved in the investigation case have also voluntarily suspended their participation in the group's work.
Bitgin Ensures Normal Operations and User Rights
Bitgin released a statement on November 13, asserting that its operations are normal and user rights will not be affected by the investigation. The exchange stated that Zhang, the chief operating officer, was involved with firms connected to the Eighty-Eight Guild Hall money laundering incident between late 2021 and March 2022. However, Bitgin clarified that Zhang ceased all communications with the counterparties after discovering the money laundering allegations. The exchange is fully cooperating with the investigating unit and providing necessary assistance to ensure a smooth investigation process.
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