Securities and Futures Bureau issues "Crypto Hu Shi" warning announcement
The Securities and Futures Bureau of the Financial Supervisory Commission yesterday (12/17) issued a warning announcement against the well-known virtual currency Internet celebrity "Crypto Hu Shi" and its operating company Yangji Co., Ltd., pointing out that the industry has not completed the money laundering prevention law compliance statement and is not allowed to engage in virtual currency transactions. Currency-related business solicitation activities. This is the first KOL (opinion leader) to receive a warning since the virtual asset registration system was launched this year.
Source: Securities and Futures Bureau of the Financial Supervisory Commission. Special warning area for securities and futures companies and commodities not approved by the Financial Supervisory Commission.
According to the Securities and Futures Bureau’s announcement, Yangji Co., Ltd. has not completed relevant registration in accordance with the (Registration Measures for Money Laundering Prevention of Enterprises or Persons Providing Proposed Asset Services), nor has it completed a compliance statement with the Financial Supervisory Commission on Money Laundering Prevention Laws. Therefore, it is prohibited from proceeding. Any virtual currency platform business solicitation activities. The Securities and Futures Bureau reminds investors to avoid virtual currency transactions with the company and not to transfer money to its account.
According to company registration information, Yangji Co., Ltd. is located in Xinzhuang District, New Taipei City, and was approved for establishment in March 2023, with a capital of 200,000 TWD. Its main business scope includes retail, wholesale, international trade, and consulting services. However, the company has not applied for permits related to virtual asset business, which evidently does not match its actual operation of virtual currency business.
Source: Taiwan Company Network Yangji Co., Ltd. has not applied for permits related to virtual asset business, which evidently does not match its actual operation of virtual currency business.
KOL's recommendation of virtual currency courses sparks controversy
In addition, Crypto Hu Shih conducts daily technical analyses and provides virtual currency investment courses through social media, YouTube channels, and other online platforms. The course fees are divided into beginner level at 6,200 TWD/year, intermediate level at 9,300 TWD/year, and advanced level at 15,500 TWD/year. Although these contents are marked as 'simulated currency operations, not investment advice,' they still attract many followers.
However, the Securities and Futures Bureau pointed out that if these courses and services involve virtual asset trading platform-related businesses, they must complete registration and declaration procedures according to law. Engaging in related activities without approval violates existing regulations and may face further investigation and penalties.
In addition to the courses, Crypto Hu Shih will also share market trend analyses in videos, such as recent discussions on Litecoin ($LTC) long-term target price ranges, prompting some users to follow suit. Although he has repeatedly stated that his content is for reference only, it may still touch upon legal boundaries.
Source: 'Crypto Hu Shih' Fan Page
Industry turbulence and investor vigilance
This incident not only reveals the challenges of law enforcement and regulation in the virtual asset market but also casts a shadow on investors' trust in 'KOL recommendations.' As the virtual currency market rapidly develops, related risks have gradually surfaced, and how to balance innovation and regulation has become a common issue faced by various countries.
The Financial Supervisory Commission emphasizes that investors should avoid participating in unapproved virtual currency businesses and can check the list of legitimate operators on the Securities and Futures Bureau website. Operators engaged in virtual currency-related activities must follow anti-money laundering registration procedures to ensure market operation transparency and safety.
As for whether 'Crypto Hu Shih' will accept legal investigation in the future, the industry is concerned about whether it can complete relevant statements and continue operations. However, this incident has sounded the alarm for other virtual currency KOLs, reminding operators to comply with laws and regulations to avoid damage to reputation and business development due to legal risks.
(Crypto City) Legal Tips
Due to most people's concerns about KOLs promoting cryptocurrencies, there have been previous compilations (Taiwan Virtual Asset Self-Regulatory Guidelines for Dummies) from (Crypto City) that interested readers may refer to. Regarding this incident, we also asked our legal personnel the following three questions for readers' reference, hoping that everyone would not face legal disputes due to crossing the line:
1. Where can readers see relevant announcements?
Currently, there is only a notice of investigation (content in the warning area), but the industry believes that Hu Shih may have violated the Futures Trading Act and the Securities Investment Trust and Consulting Act. Due to its involvement in a criminal case, it cannot be verified at the moment (investigation secrets are not disclosed).
2. How do legal personnel view this matter?
According to existing information, 'it is prohibited to engage in business activities soliciting virtual currency platform operations,' and unregistered operators are not allowed to conduct, solicit, or engage in commercial activities related to virtual currency platforms. It is necessary to determine whether the work of exchanges is subject to the approval of the competent authority. Additionally, Hu Shih's solicitation of business can be interpreted as an extension of exchange business. This extension needs to be registered in accordance with the 'Registration Regulations for Anti-Money Laundering for Virtual Asset Services or Personnel.' Of course, it does not rule out that Hu Shih solicited business for unapproved exchanges, and the red line is drawn here.
Virtual currency platforms (domestic virtual asset platforms and trading) refer to engaging in the following activities for others
Exchange between virtual assets and New Taiwan Dollars, foreign currencies, and currencies issued in mainland China, Hong Kong, or Macau.
Exchange between virtual assets.
Transfer of virtual assets.
Custody and management of virtual assets or provision of related management tools.
Participation in and provision of financial services related to the issuance or sale of virtual assets.
3. Are there any precautions or suggestions to consider?
If the business model involves virtual assets, it should conduct buying and selling through compliant exchanges to avoid direct solicitation or obtaining consideration from exchanges; it is necessary to determine whether the cooperating exchange complies with government supervisory mechanisms and to evaluate carefully. It is still recommended to cooperate with compliant exchanges.
[Disclaimer] The market has risks, and investment should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, viewpoints, or conclusions in this article align with their specific circumstances. Investing based on this is at your own risk.
'Taiwan's Cryptocurrency KOL Encountered Trouble! Crypto Hu Shih Warned for Illegal Solicitation, Lawyer Teaches 2 Tips to Avoid Crossing the Line' This article was first published in 'Crypto City'
