Bitgin, a cryptocurrency exchange operating in Taiwan, is facing a police investigation for money laundering following the arrest of its Chief Operating Officer, Yuting Zhang, for his alleged role in a major money laundering scandal, local media reported.
'88 Guild Hall': Money Laundering Ring in Taiwan
Zhang's association with the '88 Guild Hall' money laundering incident from late 2021 to March 2022 was confirmed by the crypto exchange in an official statement. The '88 Guild Hall' controversy erupted in Taiwan, exposing a massive money laundering scandal. Two local businessmen, Zhemin Guo and Chengwen Tu, are primarily accused of running the multi-billion dollar money laundering network using a network of foreign exchange offices and crypto exchanges.
In the statement yesterday (Monday), the exchange clarified its operations were not affected by the investigation and the arrest. It is further cooperating with the investigation, providing necessary information to the authorities.
"At present, Bitgin is fully cooperating with the investigating unit and actively providing all necessary assistance to ensure the smooth conduct of the investigation and hopes that the facts can be clarified as soon as possible," Bitgin stated (translated from Mandarin).
A Self-Regulating Industry
Cryptocurrency exchanges are not officially regulated in Taiwan. However, the locally operated exchanges established a Virtual Asset Service Provider Preparatory Office in September for self-regulation of the industry. Bitgin is additionally a member of the group.
The General Counsel of the Taiwan VASP Association, Yuling Tsai, said in a statement: "This time, a member of the preparatory group was involved in the investigation case. The preparatory group immediately held a meeting and issued a public response. The members involved in the case also took the initiative to suspend participation in the work of the preparatory group."
Moreover, the exchange confirmed that the COO ceased all communications with counterparties following the charges brought against him.
Earlier this year, Taiwan's Financial Supervisory Commission introduced some stringent rules last September that will effectively ban the presence of all unregistered foreign crypto exchanges within its jurisdiction.
However, rather than bringing a regulatory framework, the regulator encouraged the local exchanges on self-regulation.
Apart from Bitgin, Taiwan is tackling the exposure of its citizens to JPEX, which allegedly pulled off Hong Kong's largest financial scam. The Taiwanese authorities raided the local office of JPEX and identified suspects in the alleged fraud.
This article was written by Arnab Shome at www.financemagnates.com.
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