Bitgin, a Taiwanese cryptocurrency exchange, is facing an investigation from the police, confirming its chief operating officer’s brief relationship with an alleged money laundering group on Nov. 13.
The Taiwanese police are investigating the cryptocurrency exchange Bitgin for money laundering. Early this week, local news sources reported that Taiwanese police arrested the firm’s chief operating officer, Yuting Zhang, on suspicion of his involvement in the “Eighty-Eight Guild Hall” money laundering incident.
In a prior incident, police charged local businessmen Zhemin Guo and Chengwen Tu with operating a multibillion-dollar money laundering conspiracy by laundering illicit proceeds obtained from overseas wire fraud through their foreign exchange offices and cryptocurrency exchange accounts.
Additionally, Tu faces tax evasion charges in the country for allegedly getting fraudulent export tax refunds totaling 300 million New Taiwan dollars ($9.28 million) via the international sale of video game credits.
There is no official licensing regime for cryptocurrency exchanges in Taiwan now. Bitgin, in conjunction with its counterparts in the industry, established the Virtual Asset Service Provider Preparatory Office in September with the dual objectives of self-regulation and political lobbying. Yuling Tsai, general counsel of the Taiwan VASP Association, commented on the incident as follows:
“This time, a member of the preparatory group were involved in the investigation case. The preparatory group immediately held a meeting and issued a public response. The members involved in the case also took the initiative to suspend participation in the work of the preparatory group.”
This time, the investigation case involved a preparatory group member. The preparatory group convened a meeting and issued a public response without delay. The individuals implicated in the matter demonstrated initiative by ceasing their involvement in the initial group’s activities.
The exchange issued the following statement on November 13: “All operations are ordinary, and user rights will remain unaffected.” From late 2021 to March 2022, chief operating officer Zhang was allegedly affiliated with companies implicated in the Eighty-Eight Guild Hall money laundering incident, as reported by Bitgin.
Bitgin stated, however, that Zhang severed all ties with the counterparties upon learning of the money laundering allegations.
“At present, Bitgin is fully cooperating with the investigating unit and actively providing all necessary assistance to ensure the smooth conduct of the investigation and hopes that the facts can be clarified as soon as possible.”
