Virtual currency scams have become a major focus for law enforcement and financial regulatory authorities. However, scam groups have become increasingly cunning, making “home-based currency dealers” a new challenge for financial security in 2024. With the escalation of criminal methods, Taiwan’s Financial Supervisory Commission and Criminal Investigation Bureau have begun to cooperate in order to protect the public from this new type of fraud.
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Actively regulating personal currency dealers: Requiring compliance statements for more than three transactions
Increasing percentage of virtual currency scam cases: Accounting for over 10% of fraud cases
Taiwan’s new front in fraud: “Home-based currency dealers”
Fraudulent home-based services that come to your house
Taiwan’s anti-fraud efforts doubled last year, but it is still just the tip of the iceberg
Difficulties in crackdown: Tracing the flow of encrypted currencies
In this battle against fraud, the Financial Supervisory Commission has taken unprecedented measures by including individual currency dealers in its regulatory framework. According to the latest regulations, any individual currency dealer who handles more than three digital virtual currency transactions must make compliance statements, report money laundering activities, and comply with tax regulations. This policy expands the scope of supervision beyond corporate entities, now also including individual currency dealers.
Financial institutions have cited statistics from the Criminal Investigation Bureau to indicate that crimes related to “digital currencies” account for over 10% of all fraud cases.
In 2023, with the diversification of fund transfer methods, criminal organizations have shifted towards providing “home-based services,” particularly the “home-based currency dealer” model. Through specially developed apps, victims’ cash is converted into virtual currencies for illegal transactions.
The Criminal Investigation Bureau has revealed that “home-based services” mainly include “home collection of money” and “home-based currency dealers.” The latter is an app specifically designed for fraud syndicates to directly operate victims’ mobile phones for virtual currency transactions. Initially, the fraud groups induce victims to invest small amounts of money with promises of small profits, but once the investment amount increases, they withdraw all funds in one go.
According to the latest statistics before the Lunar New Year, in 2023, through cooperation between the police and banks, the amount of fraud successfully prevented reached 8.989 billion yuan, which is twice the amount prevented throughout the entire year of 2022. Although this achievement is significant, the continuous evolution of fraud techniques indicates that challenges still exist. The “home-based service” approach used by fraud syndicates is more covert and difficult to trace.
One of the biggest challenges in cracking down on fraud crimes related to virtual currencies is the existence of over-the-counter (OTC) transactions, which provide hidden breakpoints in the flow of funds for fraud syndicates. The most common method is to convert funds into Bitcoin or other virtual currencies through cash transactions with currency dealers and then transfer them to members of the fraud syndicate.
With the continuous advancement of financial technology, the battlefield against fraud is constantly changing. In 2024, “home-based currency dealers” have become the new focus, highlighting the challenges faced by financial security in the digital age. Government agencies, financial institutions, and the public must remain highly vigilant, collaborate, and protect their own and others’ property and security.
Home-based services OTC
Over-the-counter transactions
Fraud