Cryptocurrency exchange Bitgin is under investigation by Taiwan's police on suspicions of engaging in money laundering activities. The investigation was launched following the arrest of Yuting Zhang, Bitgin's chief operating officer, in connection with the money laundering incident dubbed "Eighty-Eight Guild Hall."

Police authorities have intensified their scrutiny of the exchange in an effort to uncover any illicit financial activities, according to Cointelegraph.

Accusations Against Local Business Figures

TradibgViews reported that before the arrest of Zhang, local business figures Zhemin Guo and Chengwen Tu were accused by the police of orchestrating a massive multibillion-dollar money laundering scheme.

This operation allegedly involved utilizing their foreign exchange offices and crypto exchange accounts to launder proceeds of crime obtained through wire fraud committed overseas. In addition, Tu faces additional charges of fraudulently claiming 300 million New Taiwan dollars ($9.28 million) in connection with the fraudulent export tax refunds related to the overseas sale of video game credits.

Regulatory Challenges in the Taiwanese Cryptocurrency Exchange Market

Taiwan currently lacks an officially established licensing regime for cryptocurrency exchanges. To address this regulatory gap and encourage self-regulation, Bitgin, and other industry peers have formed the Virtual Asset Service Provider Preparatory Office.

This office aims to develop self-regulatory measures and advocate for favorable policies from government officials. Yuling Tsai, the general counsel of the Taiwan VASP Association, has confirmed that the preparatory group has convened and issued a public response in light of the ongoing investigation. The individuals implicated in the case have voluntarily suspended their involvement with the preparatory group.

Bitgin has issued a statement asserting that the investigation will not affect its operations or compromise the rights of its users. The exchange has disclosed that COO Zhang was involved with the Eighty-Eight Guild Hall money laundering incident between late 2021 and March 2022.

Nevertheless, Bitgin emphasizes that when the money laundering allegations came to light, Zhang immediately cut off all communication with the counterparties involved. The exchange actively collaborates with the investigating unit and provides all necessary assistance to ensure a smooth and thorough investigation process. Bitgin hopes for a swift clarification of the facts surrounding this case.

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