Legislator Ke Jun-jun questions Financial Supervisory Commission: Prohibiting Bitcoin ETF sub-custody is a lose-lose-lose situation, should protect investment rights

Kuomintang's newly elected legislator Ke Jyun, also an academic and cryptocurrency enthusiast, questioned Financial Supervisory Commission Chairman Huang Tianmu for the first time at the Legislative Yuan's Finance Committee on March 4th. He asked the FSC to explain its decision to prohibit Taiwanese people from purchasing Bitcoin ETFs through multiple intermediaries. Chairman Huang Tianmu explained that besides denying the intrinsic value of Bitcoin, he also mentioned that the approval by the U.S. SEC is not necessarily indicative of the intentions of the regulatory authorities. In addition, the possibility of Bitcoin ETFs through multiple intermediaries is not impossible, as the Securities and Futures Institute can propose a complementary plan by April for the FSC to review.

Legislator Ke Ju-Chun angrily declares: Prohibition results in a lose-lose-lose situation, disregarding investment rights

Taiwan is enthusiastic about overseas investments, why exclude Bitcoin ETFs

Legislator Ke Ju-Chun stated that data shows a high interest among Taiwanese in overseas investments, with a significant increase in entrusted accounts last year: 4.65 million entrusted accounts, adding 850,000 new accounts, a 13% growth from the 750,000 new accounts in 2022, with the total entrusted amount reaching 4.48 trillion NTD.

Ke Ju-Chun emphasized that the Financial Supervisory Commission (FSC) also stated in its policy plans for 2024 that it will open up diverse investment opportunities through suitable banks to enhance the competitiveness of international wealth management services. However, when Bitcoin spot ETFs became a new mainstream market option in the U.S., the government went against the tide, ordering that related virtual currency products "can only accept entrusted sales and not accept new entrusted purchases."

Taiwan prohibits the purchase of virtual currency-related securities through entrusted accounts, and Bitcoin spot futures ETFs are also under regulation

Chairman Huang Tien-Mu: U.S. SEC was forced to open up Bitcoin ETFs

Chairman Huang Tien-Mu stated that although the U.S. market has opened up Bitcoin spot ETFs, the SEC was forced to do so based on the outcome of court litigation; from a regulatory perspective, it remains cautious about investments related to virtual currencies, hinting that the FSC will maintain a similar stance on opening up ETFs.

Chairman Huang Tien-Mu also mentioned that Bitcoin has no intrinsic value, high volatility, and is unrelated to the real economy, which is why Taiwan has not opened up related entrusted accounts.

Legislator Ke Ju-Chun: High volatility is not a reason, prohibition results in a lose-lose situation

Ke Ju-Chun stated that investment funds involve risks, and if high volatility is the reason for prohibition, then shouldn't the FSC regularly assess existing entrusted accounts for U.S. stocks and funds, and prohibit subjects with high volatility? The intrinsic value of Bitcoin should also be based on research rather than personal subjective judgments.

Ke Ju-Chun emphasized that Taiwanese have a high interest in investing in virtual assets, and the prohibition of Bitcoin spot ETFs forces investors to use overseas brokers through VPNs to make purchases, leaving them without recourse in case of investment disputes, and they may even fall victim to fraud.

"This is a lose-lose-lose situation for investors, brokers, and regulatory authorities. The FSC should protect the investment rights of the public."

Securities firms' association can propose complementary plans by April

Chairman Huang Tien-Mu concluded by stating that regarding lifting the ban, the Securities Firms' Association has been asked to propose complementary plans by April this year for further review by the FSC.