Taiwanese cryptocurrency exchange Bitgin is currently under investigation for alleged money laundering activities.
The focus of the inquiry revolves around the arrest of Yuting Zhang, the company’s Chief Operating Officer, implicated in the “Eighty-Eight Guild Hall” money laundering case.
Earlier, local businessmen Zhemin Guo and Chengwen Tu faced accusations of orchestrating a significant money laundering operation worth billions of dollars.
The alleged scheme involved using foreign exchange offices and cryptocurrency exchange accounts to launder illicit proceeds obtained through wire fraud activities conducted overseas.
Tu, one of the accused, is further charged with deceiving the country’s tax authorities.
This involved falsely claiming 300 million New Taiwan dollars (equivalent to $9.28 million) in fraudulent export tax refunds through the illicit overseas sale of video game credits.
A notable aspect of this incident is Taiwan’s lack of an official licensing framework for cryptocurrency exchanges.
Bitgin and industry peers established the Virtual Asset Service Provider Preparatory Office in September for self-regulation and engagement with political officials.
Yuling Tsai, General Counsel of the Taiwan VASP Association, commented on the situation.
“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.”
Bitgin reassures its users that operations remain unaffected, and user rights are safeguarded.
The exchange claims that COO Zhang ceased communications with implicated parties upon discovering the allegations, pledging full cooperation with investigative authorities for a thorough and expeditious inquiry.
Bitgin’s money laundering scandal highlights inadequacies in Taiwan’s cryptocurrency exchange regulation.
With key personnel embroiled in a fraud operation, the incident raises concerns about potential criminal activities within the industry.
Bitgin’s attempt to downplay the situation and the absence of a licensing framework cast doubts on industry self-regulation.