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Cryptocurrency crime to be targeted

Illicit transactions are difficult to stop, as the digital wallets holding funds and the networks themselves are outside of Taiwan, a legislator said

  • By Yang Cheng-yu and Jake Chung / Staff reporter, with staff writer

Government agencies plan to bolster cross-departmental efforts to target criminal activities at their source, Premier Su Tseng-chang (蘇貞昌) told legislators after New Power Party (NPP) Legislator Chiu Hsien-chih (邱顯智) expressed concern that Taiwanese laws are too conservative in dealing with cryptocurrencies.

The Global Anti-Scam Organization and victims of cryptocurrency scams have criticized Taiwan’s prosecutors and law enforcement officials for being reluctant to contact cryptocurrency exchange platforms for assistance, Chiu said.

Chiu commended the government’s efforts in fighting recent Cambodia-based fraud rings, but said that more must be done to enable law enforcement agencies to freeze cryptocurrency transactions, which is a primary method of transferring funds for illicit activities.

Photo: Reuters

The Criminal Investigation Bureau is waiting until this month to file its first-ever request to freeze cryptocurrency transactions, while other countries can already take such measures, Chiu said.

The bureau reasons that there is no legal basis or precedent for taking such action, he said.

Regarding the assets the bureau is looking to freeze, the cryptocurrency exchanges are based offshore and the electronic wallets are not owned by Taiwanese, creating problems in jurisdiction and making notices difficult to deliver, Chiu said, citing bureau officials.

Photo: CNA

However, the journal Criminal Policies and Crime Prevention in December last year said that transactions using blockchain technology are transparent at every level, and it is possible to track down the recipient of the funds, he said.

Cryptocurrency exchanges have demonstrated a willingness to work with law enforcement, Chiu said, citing the example of Binance, the exchange with the world’s largest daily trading volume, which has established a search-and-assist system used by law enforcement agencies.

Binance’s system supports traditional Chinese language searches, he added.

Taiwan’s law enforcement agencies have shown less commitment than cryptocurrency agents in tackling fraud, Chiu said.

Minister of Justice Tsai Ching-hsiang (蔡清祥) said that the High Prosecutors’ Office is collaborating with cryptocurrency exchanges, and can access transaction data.

The Ministry of Justice operates a staff education program that involves overseas training, which would aid prosecutors.

Su said that the government is striving to ensure that criminal cryptocurrency activity is controlled and regulated.

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