OKX suddenly announced the offline C2C trading function in Taiwan

OKX, a well-known cryptocurrency exchange, recently announced that it will shut down Taiwan’s C2C trading function on June 24, 2024. However, starting today (18th), OKX has prohibited merchants from issuing new orders and will not receive new orders.

Starting from June 24, all C2C transaction functions in Taiwan will be banned and C2C merchants will be removed. Before the deadline, merchants need to apply for downgrade online, handle all ongoing orders and order disputes, and delete all orders.

OKX emphasized that this announcement only announced the offline C2C transactions, deposits and withdrawals, and other product functions will not be affected and normal transactions will occur.

As for why the Taiwan C2C transaction function was suddenly offline? The reason given by OKX was "a decision made after careful consideration of market business development."

Image source: OKX announcement
OKX Exchange announced that it will offline Taiwan C2C trading service on 6/24

What is C2C transaction?

In exchanges, C2C transactions mean cryptocurrency transactions between users, and exchanges usually play the role of matching transactions with the seller's cryptocurrency in pre-escrow to ensure the buyer's security.

The convenience of C2C trading is that it allows users to use local legal currency to purchase cryptocurrencies. For example, investors can use Taiwan dollars to purchase Tether ($USDT), and then trade other cryptocurrencies within the exchange. However, since C2C sellers are usually individual users or currency merchants, potential risks may arise during transactions.

What are the possible reasons for OKX to offline Taiwan C2C?

Why did OKX suddenly offline Taiwan C2C trading services? Outside speculation is related to regulatory changes in Taiwan. As Taiwan gradually tightens the trading practices of domestic currency dealers in Taiwan, OKX may be the first to take action to avoid potential risks.

At the same time, the Taiwan C2C trading service of Binance, the world’s largest exchange, is still operating normally and no measures have been taken yet.

Last year, the Taiwan Financial Supervisory Commission announced the guiding principles for virtual asset service providers (VASP) and is expected to introduce special laws to supervise virtual asset operators. Policies for individual currency dealers will also be tightened. The Financial Supervisory Commission has long stipulated that any VASP operating in Taiwan (including personal currency dealers) must legally register and complete an anti-money laundering compliance statement, otherwise a fine of NT$500,000 to NT$10 million will be imposed.

According to the latest information from the Securities and Futures Bureau of the Financial Supervisory Commission (last updated on 3/1), currently only 25 platforms in Taiwan have completed the declaration. Among them, the founder and director of Ace Digital Innovation Company (ACE Exchange) were arrested for participating in fraud and money laundering. After all, the chief operating officer of the company (BITGIN Exchange) was also involved in the 88 Club money laundering case.

The Financial Supervisory Authority will manage virtual assets in four stages

On June 12, the Financial Supervisory Commission disclosed for the first time the schedule and plan for virtual asset management, which will be regulated in four stages. The first is to require VASP operators to complete an anti-money laundering compliance statement, the second is to promote the establishment of an association for VASPs (completed), and the last two stages are to strengthen the management of money laundering prevention laws and formulate special laws.

However, since it takes time to formulate special laws, the Financial Supervisory Commission has outsourced research in January this year, and the research team will submit a report in September. It is expected that the draft will not be released until the end of this year, and will not be delivered until June next year. Review by the Executive Yuan.

Taiwan’s virtual assets law is coming soon! The Financial Supervisory Commission announced a four-phase management plan and will submit it to the Political Yuan in June next year