Sat, Apr 21, 2018 - Page 12 News List

Cryptocurrency regulation to be set up by November

By Ted Chen  /  Staff reporter

The government expects to establish a regulatory system on cryptocurrencies by November that would focus on combating their use in money laundering and other illegal activities, Minister of Justice Chiu Tai-san (邱太三) said yesterday.

As the extreme volatility of cryptocurrencies continues to capture headlines, various government agencies agree that there is a need for the emerging digital currencies including bitcoin to be regulated, Chiu said.

Cross-departmental talks currently revolve around whether to require real-name registration for individuals engaging in cryptocurrency trading — a measure that has been implemented in South Korea, Chiu said.

The government has not ruled out an all-out ban on cryptocurrency trading, he said, adding that the central bank, the Ministry of the Interior and law enforcement agencies have yet to work out the details.

The Ministry of Justice on Tuesday last week held talks with local cryptocurrency platforms MaiCoin and BitoEX (幣托) at an event reviewing the nation’s efforts to counter money laundering and terrorism financing, he said.

The nation’s cryptocurrency regulation would be completed ahead of a review by the Asia Pacific Group on Money Laundering, which is to take place in November, he added.

Meanwhile, Financial Supervisory Commission Chairman Wellington Koo (顧立雄) said that there is a lack of transparency with cryptocurrency trading due to a gap between cryptocurrency trading accounts and bank accounts.

Although MaiCoin and BitoEx work with select banks to facilitate their business model of collecting fiat money to purchase cryptocurrencies on behalf of their customers, regulators are not able to verify the identity of all investors and their digital asset transactions, Koo said.

He said the commission has classified cryptocurrency as a high-risk commodity and has imposed stringent requirements for lenders acting as collecting banks for cryptocurrency platforms.

However, the government is unable to tax individual investors on capital gains from cryptocurrency trading on other online exchanges, while platforms that facilitate purchases with fiat money are taxed based on their fee income, he said.

Separately, Koo said that thanks to continued efforts by the government and financial institutions to fight money laundering, filings of suspicious transactions surged from about 9,000 in 2015 to about 23,000 at the end of last year, leading to the closure of a significant number of shill accounts.

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