Taiwan’s Bitgin Crypto Exchange Faces Money Laundering Charges

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Bitgin, a Taiwan-based cryptocurrency exchange, is currently under investigation by the country’s police authority for an alleged involvement in a money laundering fraud scheme.

Taiwan Task Force Repartriates Guo Zhemin From Thailand

Bitgin is facing increased scrutiny following the apprehension of Yuting Zhang, the platform’s COO, in connection with the ‘Eight-Eight Guild Hall’ money laundering case, which shook the Asian country’s financial sector.

However, more investigation has shed light on the association of two local businessmen, Zhenmin Guo and Chengwen Tu, in the scheme.

According to a November 12 report by a local news publication, Taiwan’s prosecutorial department has made significant progress in repatriating Guo from Thailand.

With Guo in custody, the task force has begun a thorough examination of relevant financial flows to scrutinize and unveil additional transactions and illicit methods involved in processing the fraud scandal.

The investigation also highlighted that Tu is heralded as the region’s ‘Godfather of Money Laundering.’

The report noted that the two culprits used Bitgin and a foreign exchange bureau to launder money obtained through offshore fraudulent activities.

Notably, Tu used the Ruisen Bank as a cover to assist gaming and electronic fraud associations in money laundering through cryptocurrency exchanges.

The money recycling scandal of both culprits exceeds 10 billion Yuan (over $1.37 billion). Despite the task force’s large-scale search efforts, Tu fled the country to evade legal consequences.

Kings of Taiwan’s Money Laundering Arena

Guo and Tu are considered strategic partners in the scandal, each possessing a net worth of 10 billion yuan. They jointly oversee an international-level ‘finance business unit’ engaged in diverse operations, including gaming and clandestine exchanges between Taiwan and Southeast Asia.

Tu faces additional allegations related to processing fraudulent activities through Humor Technology.

According to a UDN report, the Godfather of Laundering reportedly bought and sold game points and applied for national tax refunds through the guise of ‘export.’

This deceptive operation deceived the Bureau and enabled Tu to profit 300 New Taiwan dollars ($9.28 million).

With Guo now repatriated and taken into custody, the task force is now focused on apprehending Chengwen for questions on illicit cash flow.

Taiwan VASP and Bitgin Responds to Yuting Zhang Allegations

The ongoing case underscores the financial risks associated with money laundering through cryptocurrency transactions, a norm due to Taiwan’s lack of regulatory sanctions.

Meanwhile, Bitgin is also facing legal and community scrutiny due to its tie with Zhang and the money laundering scheme.

As a member of the Taiwan Financial Supervisory Commission, the exchange took part in establishing a Reserve Group for the Taiwan Virtual Asset Service Provider (VASP) Association in September.

This association was created to self-regulate the crypto industry and seek legal support, with Zhang as one of the Reserved members.

In response to the incident, the VASP Guild Preparatory Group temporarily suspended members linked with the money laundering case.

This implies that Zhang will step back from operational activities until the situation is resolved or more details are clarified.

Bitgin also issued a statement on November 13, assuring users that its operations are legal and would not hurt users’ trading rights.

The exchange disclosed that the COO called off all communications with its platform and subsidiaries after he was notified of his alleged association in the ‘Eighty-Eight Guild Hall’ scandal.

In a closing note, Bitgin stated it is presently cooperating with the task force and actively providing all information needed to drive a smooth, transparent, and quick investigation.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.