Taiwan Special Law Public Hearing | Xrex CEO Hui-Zong Xiao: Taiwan operators' technology can combat fraud, regulators should focus on industry integration.

The Taiwan Finance Committee convened a special public hearing with Commissioner Luo Mingcai, gathering representatives from the Financial Supervisory Commission, major players in Taiwan's virtual currency industry, as well as relevant experts and scholars. Xrex's Chief Revenue Officer, Xiao Huizong, representing the Taiwan FinTech Association, discussed the self-regulation efforts of Taiwanese industry players and their initiatives to combat fraud.

Commissioner Luo Mingcai expressed concerns over the slow progress of the special legislation, with only six dedicated personnel at the Financial Supervisory Commission, and proposed discussions on the establishment of a Virtual Asset Management Department.

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Taiwanese Operators Demonstrate Self-discipline and Practical Actions

Xrex's Chief Revenue Officer, Hui-Zong Xiao, stated that in response to industry challenges and societal issues, operators have shown self-discipline by implementing measures such as real-name verification standards. With full industry participation, Taiwanese operators have demonstrated their strength and achievements, proving significant progress within a short period.

Self-discipline and Technology to Combat Fraud

He believes that regulatory demands in the virtual asset industry stem from global issues like the FTX incident. In fact, technology can effectively combat fraud, not necessarily requiring stricter regulations. Despite Singapore having stricter regulations, its fraud issues are more severe.

Establishment of Associations and Self-regulatory Norms

He mentioned that on March 25th, the Ministry of the Interior officially allowed the establishment of associations. During the formulation of self-regulatory norms, operators could provide input, aiming to establish the association within three months. Despite facing many challenges in the association's establishment, collaboration with the Ministry of the Interior and the Financial Supervisory Commission gradually resolved issues.

Development of Articles and Classification of Operators

He explained that operators would be classified into three categories: A, B, and C, ensuring a balance among different types of operators in the board of directors' structure. The formulation of articles involved continuous communication with the Ministry of the Interior and the Financial Supervisory Commission, eventually settling disputes to ensure a balanced interest for all parties.

Efforts and Innovations of Taiwanese Operators

Xrex's Chief Revenue Officer, Hui-Zong Xiao, mentioned that Taiwanese operators are actively developing anti-fraud technologies and providing free-to-use tools. The Taiwan Financial Technology Association (TFTA) is collaborating with several global giants to jointly promote the implementation of anti-fraud measures. He emphasized the importance of anti-money laundering and industry-wide fraud prevention, along with entrepreneurial standards that meet Taiwan's needs. Operators have invested significant resources, showcasing the potential of self-discipline and technology.

Compliant Exchanges Can Prevent Users from Turning to High-Risk Platforms

Highlighting the importance of compliant exchanges and the challenges posed by underground exchanges. Compliant exchanges can effectively alert and notify fraudulent activities, collaborating with law enforcement for investigations and tracking.

Technological Breakthrough: Using AI to Combat Fraud

He mentioned that some operators have developed AI identification modules that efficiently identify and alert fraudulent behaviors, emphasizing Taiwan's innovative and technologically leading position in the global anti-fraud field.

Judicial Cooperation and Asset Recovery

He mentioned close cooperation with the Financial Action Task Force (FATF), achieving judicial assistance and asset freezing, emphasizing an aggressive anti-fraud strategy by deterring fraudulent activities through freezing and recovering substantial funds.

Future Outlook: Exchanges Achieving Integration of Upstream and Downstream

Xrex's Chief Revenue Officer, Hui-Zong Xiao, stated that the future focus is to integrate energy, technology, and data to create conditions for regulation. It is necessary to achieve the integration of exchanges upstream and downstream and risk management to develop a healthy virtual asset trading ecosystem.