Police agency calls out Meta for allowing scam groups to advertise, only Binance cooperates among overseas exchanges

The Legislative Yuan convened a public hearing on "Legislation for Preventing Fraud Crimes and Inventory of Anti-fraud Mechanisms by Various Departments" on March 14th. In addition to reviewing the effectiveness of anti-fraud measures, the Criminal Investigation Bureau also mentioned that Binance is currently the only overseas exchange that can cooperate with law enforcement agencies to access accounts involved in cases and freeze cryptocurrencies involved in cases.

Confiscation of Nearly 4 Billion Illegal Proceeds in 2023, an 80% Increase

According to a report from the Ministry of the Interior at a public hearing, the effectiveness of investigative efforts and crackdowns in 2023 is as follows:

• 1,895 fraud groups busted: compared to 1,628 cases in 2022, an increase of 267 cases, up by 16.40%.

• 17,495 suspects captured: compared to 15,047 in 2022, an increase of 2,448 individuals, up by 16.27%.

• Illegal gains confiscated amounted to 39.2 billion NT dollars: compared to 22.1 billion NT dollars in 2022, an increase of 17 billion NT dollars, up by 77.38%.

Law Enforcement Agencies Encounter Obstacles in Fighting Fraud

During the meeting, challenges in execution of work and recommendations were discussed, including:

1. Creation and distribution of duplicate content: Fraudsters are distributing advertisements at a rapid pace, while platform advertisers only review and take down content on a case-by-case basis.

2. Lack of source management by online platform operators: Platforms like Meta use freedom of speech as a reason to not review account creation, allowing fraudulent groups to continuously post fake investment advertisements even after being reported and taken down.

3. Call for comprehensive legal mechanisms: The parent companies of current online platform operators are all located overseas, making enforcement and official notifications difficult.

4. Difficulty in accessing information: It takes an average of over one month for law enforcement to request crime-related data from foreign companies, hindering timely investigations.

Only Binance Cooperates Among Overseas Exchanges

Total Amount of Intercepted Fraud Nearly Doubled in 2023

Meeting data shows that the on-site inquiries and questioning carried out in collaboration between the Criminal Investigation Bureau and Taiwanese financial institutions in 2023 revealed a staggering 75.79 billion NT dollars intercepted from individuals falling victim to fraud attempting to transfer funds out, nearly doubling from 42.41 billion NT dollars in 2022.

Regulation of Virtual Asset Platforms May Need to Intensify

The 165 Anti-Fraud Consultation Hotline system has established a mechanism for submitting inquiries with 9 Virtual Asset Service Providers (VASP) to expedite investigations into cases involving virtual assets.

However, based on the VASP Guidelines issued by the Financial Supervisory Commission, only "self-regulation by the industry" is currently being promoted, without actively scrutinizing VASP operators and individual currency traders, potentially leading to involvement in virtual asset fraud cases.

The Criminal Investigation Bureau points out the need to further enhance measures for regulating virtual asset platforms.

The Financial Supervisory Commission officially announces VASP Guidelines, both "individual currency traders" and "foreign currency traders" to be regulated

Only Binance Cooperates with Law Enforcement for Investigations

Currently, there are over a thousand overseas cryptocurrency exchanges, and the cooperation available to Taiwanese law enforcement is quite limited, with only Binance currently able to assist domestic law enforcement agencies in accessing accounts and freezing virtual currencies involved in cases.

The Criminal Investigation Bureau recommends that regulatory authorities strengthen supervision or establish relevant regulations through special laws for inclusion in the regulatory scope.

Legislator Kuo Kuo-wen convenes a public hearing on Taiwan's regulation, shocked to see representatives from Binance and Bitfinex in attendance