Taiwanese crypto exchange and VASP member Bitgin under investigation for money laundering

The exchange confirmed its chief operating officer’s brief relationship with an alleged money laundering group in a statement on Nov. 13.

Taiwanese cryptocurrency exchange Bitgin is under investigation by the country’s police force for money laundering. According to local news reports early this week, Yuting Zhang, the firm’s chief operating officer, was arrested by Taiwanese police for his alleged role in the “Eighty-Eight Guild Hall” money laundering incident.

Previously, Zhemin Guo and Chengwen Tu, two local businessmen, were accused by police of operating a multibillion-dollar money laundering scheme by using their foreign exchange offices and crypto exchange accounts to launder proceeds of crime obtained via wire fraud from overseas. Tu is also accused of defrauding the country’s tax authorities by claiming 300 million New Taiwan dollars ($9.28 million) in fraudulent export tax refunds through the overseas sale of video game credits.

Taiwan currently has no official licensing regime for cryptocurrency exchanges. In September, Bitgin, along with its industry peers, created the Virtual Asset Service Provider Preparatory Office for the purposes of self-regulation and lobbying of political officials. Regarding the incident, Yuling Tsai, general counsel of the Taiwan VASP Association, said:

“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.”

In a statement on Nov. 13, the exchange said that its operations “are normal and user rights will not be affected.” As told by Bitgin, chief operating officer Zhang was involved with firms of the Eighty-Eight Guild Hall money laundering incident from late 2021 to March 2022. However, Bitgin said that Zhang ceased all communications with the counterparties after discovering 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.”