FTX and Steaker unregulated! Legislator Guo Guowen asks about the possibility of regulation, FSC Chairman Huang Tianmu responds: Will expand supervision on domestic platforms.

Kuomintang legislator Guo Guowen questioned Financial Supervisory Commission Chairperson Huang Tien-mu at the Finance Committee on 12/5, and for the first time, Huang promised to study the regulatory direction of cryptocurrencies beyond anti-money laundering measures. Legislator Guo Guowen's questioning

Legislator Guo Guowen: The U.S., Japan, South Korea, and China all have regulatory approaches, how will Taiwan respond?

Legislator Guo Guowen questioned how Taiwan will regulate in light of the frameworks in the U.S., Japan, South Korea, and China, where China has outright banned cryptocurrencies. Taiwan, being not only a stronghold of FTX users but also having asset management platforms like Steaker affected by FTX, what is Taiwan's regulatory strategy?

Aside from the discourse on anti-money laundering, Chairman Huang Tianmu stated that they are currently conducting inter-agency research.

He first mentioned that many countries that protect FTX users do so because FTX has established subsidiaries in those countries. If users only connect to overseas platforms via mobile phones, it is beyond Taiwan's regulatory scope.

Chairman Huang Tianmu believes that the Basel Committee on Banking Supervision recently discussed the possibility that if the cryptocurrency system is brought under regulation, it may pose contagion risks to the traditional financial system, leading to systemic risks, which is also within their evaluation scope. However, the Financial Supervisory Commission (FSC) has pledged to expand supervision over domestic cryptocurrency platforms.

Related article: Huang Yashen | How will the Japanese Financial Services Agency respond to the FTX incident? How will it affect Japanese users? The inevitable "trust" dilemma

Can FTX's agency businesses be regulated?

Legislator Guo Guowen further inquired whether the many agency businesses of FTX in Taiwan, such as customer service and promotion, could be regulated through subsidiary establishment.

Chairman Huang Tianmu stated that this would be one of the directions for future deliberation. They will gradually proceed in a moderate manner to protect investors, such as suggesting asset separation.

If the FSC doesn't regulate, does the Ministry of Economic Affairs have the capability to manage?

Legislator Guo Guowen expressed that if cryptocurrencies were to be regulated by the Ministry of Economic Affairs, it would lack management capabilities, hoping that the FSC would actively take on a supervisory role. He also mentioned that, for example, the recent discussion about having third-party payments managed by the Ministry of Economic Affairs, he also questioned their actual management capabilities.

In response, Chairman Huang Tianmu mentioned that, in the case of the Ministry of Economic Affairs, the FSC has established a communication platform with them and will share experiences. Although the FSC has stricter management and is subject to regulatory expectations, the unit's resources are limited and it is not easy.

Legislator Guo Guowen's thoughts: Ban or regulate

Legislator Guo Guowen believes that an evaluation should be made to determine whether such emerging technologies are Ponzi schemes or innovative financial technologies, and then decide whether to ban or regulate to protect investors.