Scam losses equivalent to 0.9% of Taiwan’s GDP! Legislators criticize system loopholes, enabling judicially certified “legal fraudsters”.
Faced with rampant scams, legislator Guo Guowen pointed out yesterday (25th) that scam losses have reached 0.9% of Taiwan’s GDP, with investment fraud accounting for nearly 60% of that. Therefore, he questioned the Financial Supervisory Commission (FSC) chairman Huang Tianmu regarding issues related to the flow of scam money and money laundering.
Guo Guowen first cited a petition case he received as an example. In this case, after a person received money from a victim in their bank account, they claimed not to know why the money was being transferred to them. As a result, the prosecutor’s office did not prosecute, allowing the account holder to use the non-prosecution document to unfreeze the account and further misappropriate the hard-earned money of the victim.
Guo Guowen criticized this loophole, calling it a judicially certified “legal fraudster”. He proposed two major remedies. Firstly, before prosecutors decide not to prosecute, the Ministry of Justice should require the return of any ill-gotten gains. Secondly, Guo Guowen requested that the FSC amend the “Regulations for the Management of Deposit Accounts and Suspicious or Abnormal Transactions” to make the unfreezing of accounts conditional on returning any ill-gotten gains. Huang Tianmu replied that the regulations are currently being revised and this issue will be included.
Guo Guowen: Overseas operators should be actively invited to establish a presence in Taiwan
As for the issue of money laundering, Guo Guowen pointed out that the biggest loophole at present is cryptocurrency, with overseas exchanges and over-the-counter (OTC) traders being the gaps in the current regulatory mechanism.
According to FSC data, none of the 25 businesses that have passed the compliance statement are overseas exchanges. The Ministry of the Interior’s Police Administration also stated that only Binance has cooperated with investigations among overseas exchanges. Therefore, Guo Guowen requested that the FSC actively invite overseas operators to establish a presence in Taiwan to strengthen anti-money laundering measures.
️Further reading:
Cryptocurrency scams prevalent! Only “Binance” cooperates with police investigations among overseas exchanges, Ministry of the Interior calls for specialized legislation for regulation
Regarding OTC traders, Guo Guowen believes that their business is relatively simple and should not be subject to the same regulatory standards as larger exchanges. He cited the example of Thailand, which currently has a tiered regulatory mechanism, and recent legislative proposals in Hong Kong also aim to move towards differentiated regulation. Guo Guowen urged the FSC to issue separate licenses for exchanges and OTC traders to implement differentiated regulation.
Huang Tianmu responded that regulations for individual cryptocurrency businesses will be established through anti-fraud and anti-money laundering laws in the near future. He also agreed that OTC traders and exchanges should be subject to differentiated regulation and stated that the commission will consider the suggestions of the legislators in its planning.
Proofreading editor: Gao Jingyuan