The Taiwan Financial Supervisory Commission (FSC) recently convened a public hearing on virtual currencies, bringing together FSC, major virtual currency operators in Taiwan, and relevant experts and scholars. Xrex’s Revenue Director, Hui-Zong Xiao, who represented the Taiwan FinTech Association (TFTA), provided an overview of industry self-regulation efforts and the fight against fraud.
Commissioner Ming-Cai Luo expressed concern over the slow progress in enacting specific regulations and the limited personnel at FSC. He also mentioned that discussions will be held regarding the establishment of a Virtual Asset Management Bureau.
During the public hearing, MaiCoin suggested the opening of perpetual contracts and the implementation of a tiered management system for virtual currency operators.
Taiwanese operators demonstrate self-discipline and take practical action
Xrex’s Revenue Director, Hui-Zong Xiao, stated that in response to industry challenges and social issues, operators have shown self-discipline by implementing real-name verification standards and other measures. Operators have made comprehensive efforts, showcasing the strength and achievements of Taiwanese operators in a short period of time.
The need for self-discipline and technology in combating fraud
Xiao believes that the demand for regulation in the virtual asset industry stems from global issues, such as the FTX incident. In fact, technology can effectively combat fraud without necessarily tightening regulations. Despite stricter regulations in Singapore, fraud issues are more severe there.
Establishment of associations and self-regulatory norms
Xiao mentioned that on March 25, the Ministry of the Interior officially approved the establishment of an association. During the process of formulating self-regulatory norms, operators can provide input, with the goal of establishing the association within three months. Although there were difficulties in establishing the association, collaboration with the Ministry of the Interior and FSC has gradually resolved the issues.
He explained that the association’s bylaws classify operators into three categories (A, B, C) and ensure a balance in the composition of directors and supervisors from different types of operators. The formulation of the bylaws involved continuous communication with the Ministry of the Interior and FSC, ultimately resolving controversies and ensuring a balance of interests.
Efforts and innovation by Taiwanese operators
Xrex’s Revenue Director, Hui-Zong Xiao, mentioned that Taiwanese operators are actively developing anti-fraud technologies and providing free-to-use tools. TFTA is collaborating with several major international companies to promote the implementation of anti-fraud measures. He emphasized the importance of anti-money laundering and industry cooperation in preventing fraud, as well as the establishment of entrepreneurial standards that meet Taiwan’s needs. Operators have invested significant resources, demonstrating the potential of self-discipline and technology.
The importance of compliant exchanges and the challenges posed by underground exchanges
Xiao emphasized the importance of compliant exchanges and mentioned the challenges posed by underground exchanges. Compliant exchanges can effectively detect and notify fraudulent activities and cooperate with law enforcement agencies in investigations and tracking.
Technological breakthroughs: combating fraud with AI
He mentioned that some operators have developed AI identification modules that efficiently identify and alert fraudulent behavior. He also emphasized the innovative and technologically advanced position of Taiwanese operators in the global anti-fraud field.
Judicial cooperation and asset recovery
He mentioned the close cooperation with the Financial Action Task Force (FTAF) in achieving judicial assistance and asset freezing. He also emphasized the offensive anti-fraud strategy, which involves freezing and recovering large sums of money to deter fraudulent activities.
Future outlook: achieving integration in the exchange ecosystem
Xrex’s Revenue Director, Hui-Zong Xiao, stated that the future focus is on integrating energy, technology, and data to create conditions for regulation. It is necessary to achieve integration and risk management in exchange ecosystems to develop a healthy virtual asset trading ecosystem.