VASP operator under investigation! BitAsset exchange investigated due to Mainland Chinese ownership issue, BitAsset and association provide latest response

Since 2018, mainland Chinese companies have set up a virtual currency trading platform BitAsset in Taiwan without formal approval, causing high concern from Taiwan's judicial department. Recently, the Taipei District Prosecutors Office conducted a large-scale search and investigation of the related companies, and summoned and dealt with the responsible persons.

Taiwan VASP operators have encountered consecutive incidents despite their anti-money laundering declarations. After all, BITGIN Technology Co., Ltd. was involved in the 88VIP money laundering case, ACE Digital Innovation Co., Ltd. was implicated in the Aircoin fraud case, and now Asia Pacific Yiante Technology Co., Ltd., registered by BitAsset, is under investigation due to issues related to mainland Chinese investment.

Background of Asia-Pacific Easyant Company

Since 2018, "Xin Pai Blockchain," a company under the mainland China Xin Pai Media Group, established "Asia-Pacific Easyant Technology Co., Ltd." in Taiwan without approval from the Taiwan Investment Review Committee. The company mainly operates the "BitAsset" virtual currency trading platform, aiming to provide virtual currency trading services to users in the Asia-Pacific region.

Concealment of Mainland Chinese Background

In order to conceal the mainland Chinese background of Asia-Pacific Easyant Company, the company's head, Hu Zhilong, engaged in business activities such as soliciting the public to use the platform for virtual currency trading in Taiwan without formal approval from the authorities. This behavior violated relevant laws in Taiwan.

Search and Investigation Actions

The Taipei District Prosecutors Office and the Taipei City Investigation Bureau conducted searches at 8 locations related to Asia-Pacific Easyant Company yesterday. This action was taken based on Article 40-1 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, initiating an investigation into Hu Zhilong and others.

Outcome for the Head of the Company

After questioning, the Taipei District Prosecutors Office decided to allow Hu Zhilong, the head of Asia-Pacific Easyant Company, to post bail of 200,000 NTD. Three former company executives related to the case were asked to return and no further legal measures have been taken against them for now.

Taiwanese Cryptocurrency Companies Involved in Mainland Chinese Capital Difficult to Supervise

This incident has raised high concerns in society regarding the supervision of cross-border virtual currency trading platforms. With the rapid development of the virtual currency market, effectively regulating and preventing related legal risks has become a topic of common concern for the Taiwanese government and the public.

In fact, due to the easy transferability of virtual currencies, Taiwanese media, incubators, exchanges, and venture capital companies in the cryptocurrency industry have been known to have mainland Chinese elements. This investigation into BitAsset based on the VASP (Virtual Asset Service Provider) being the current regulatory focus has exposed this phenomenon.

BitAsset's Response: Persons Involved Not Current Executives

Asia-Pacific Easyant Company, through a statement by its lawyer, stated that the current executive, Guo Hongze, reached an agreement with former executive Guo Bocun on November 9, 2023, under notarization, to acquire all the shares. The company has had three different executives, with Hu Zhilong mentioned in the case being the first executive. Guo Hongze has never had any cooperation with Xin Pai Group since taking over. The investigation into whether the first executive was involved with mainland Chinese capital is still ongoing.

VASP Association: Actively Cooperating with Regulation, Only Adding Members Based on Anti-Money Laundering Lists

In response to the search of a VASP Association member today, the VASP Association stated that they will continue to monitor the investigation and actions taken by the judicial authorities regarding the case and maintain close communication with the regulatory authorities.

The association was established based on the guidelines issued by the Financial Supervisory Commission, where any entity that has complied with anti-money laundering regulations is eligible to apply for membership. The association only adds members based on anti-money laundering lists and does not have the authority to screen or remove members for other reasons.

After complying with anti-money laundering regulations, entities also need to cooperate with financial inspections. According to the report by FSC Chairman Guinlong Peng in the Legislative Yuan, VASP entities will have a clear definition in the future and will transition from a reporting system to a registration system, with entities facing criminal liability if found to have violated laws.

The association has maintained open communication with regulatory authorities and will continue to monitor the developments of the events.