The Financial Supervisory Commission (FSC) yesterday reiterated its warning that investing in cryptocurrencies bears high risks, adding that in Taiwan, only fundraising through security token offerings (STOs) is regulated by the commission.
The commission’s remarks came after the collapse of Bahamas-based FTX, which filed for bankruptcy last week after withdrawals from consumers and a failed rescue deal with Binance Holdings Ltd (幣安).
At a news conference held by local cryptocurrency exchange Pionex (派網) in Taipei, a Taiwanese investor said that before FTX’s collapse, he had invested in cryptocurrencies for about a year, attracted by the platform’s return of 5 to 8 percent, but he has now lost all his investment.
Photo: Reuters
As FTX is registered and operates overseas, it is not regulated by the commission, but Banking Bureau Deputy Director-General Roger Lin (林志吉) said the commission would monitor how foreign regulators address the fallout from FTX’s bankruptcy.
The commission has not received complaints or reports from local investors, but it would contact local cryptocurrency exchanges to see if they have partnered with FTX or have launched joint products, FSC Chairman Thomas Huang (黃天牧) said on Monday.
The collapse of FTX and the exchange’s native token FTT, as well as the impact on other popular cryptocurrencies, such as bitcoin, show that cryptocurrencies are highly volatile and cannot help investors hedge against other investment targets, so investors should be extremely careful, Huang added.
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