what happen?
According to a report by Public Television, Ko Wenzhe, chairman of the Taiwan People's Party and former Taipei mayor, was recently ordered to be detained by the Taipei District Court for violating the Corruption Crime Ordinance, including accepting bribes and seeking profits in violation of his duties, due to the Jinghua City case.
"Lianhe News Network" reported that when the prosecutor searched Ke Wenzhe's home, he found a flash drive containing a "mysterious account book", triggering speculation about whether the account record recorded that Ke Wenzhe accepted a 15 million yuan bribe from Shen Qingjing.
Wu Zijia, chairman of Formosa Electronic News, said on the "Critical Moment" program that Ke Wenzhe's flash drive is the key to hiding virtual currency bribes, and it is more likely to "wash" the wallet private key or APP.
Can’t understand the terms used in the currency circle?
Recently, the Ke Wenzhe Capital City case has become increasingly popular in online communities and TV shows. Many celebrities even publicly questioned Ke Wenzhe on TV shows for fear of "hiding the private key of his cryptocurrency wallet through USB" and when his residence was searched, The reason why the door was not open for an hour was because of "extermination of evidence."
However, many netizens and professionals in the currency circle have different views on the news media and political commentary programs when they talk about cryptocurrency, and believe that many of the words and concepts are incorrect.
Virtual Currency vs. Cryptocurrency?
First of all, many netizens are debating whether it is a "virtual currency" or a "cryptocurrency".
The so-called "Cryptocurrency" refers to a trading medium created by using cryptographic principles to ensure transaction security and control trading units, and operates based on a decentralized consensus mechanism. Bitcoin is the first currency to exist in the form of a cryptocurrency. Others, such as the stable currency USDT or various meme coins, also fall into the category of cryptocurrency.
According to the definition of the Central Bank, "virtual currency" can basically be regarded as digital currency issued by private developers and can be used to purchase goods and services provided by the website; because it does not have a physical form, it is presented in a virtual form , so broadly speaking, including MapleStory game tokens, PChome P-coin points, or cryptocurrencies such as Bitcoin, all belong to virtual currencies.
As for "virtual currency", there is no clear definition in Taiwan, but it also refers to digital currencies issued by private developers.
Most people in the currency circle are accustomed to using more precise words such as "cryptocurrency" and "Crypto" to discuss digital currencies such as Bitcoin and Ethereum. Taiwan's current regulations use the more broadly defined "virtual currency"; as for "Virtual currency" is a term often used by people outside the currency circle to refer to game currency or cryptocurrency.
Is USB a cold wallet?
The USB that Ke Wenzhe carried with him has become a major suspect in the case. Celebrities and netizens have begun to suspect that "there is a cold wallet hidden in the USB flash drive." But does this really work?
The so-called "cold wallet" is hardware used to store cryptocurrency. By storing the address private key imported by the user offline in the hardware device, it is convenient for the user to carry and save it.
@One thing that should be made more clear here is that cold wallets do not really "save money"... but refer to storing address private keys.
However, although the appearance looks very similar to USB, the two cannot be equated.
Although USB can store data, it cannot store cryptocurrency; while cold wallets can store cryptocurrency, but they currently do not have the function of file access (such as Excel).
In other words, if the USB that Ke Wenzhe carries with him has an Excel file in it, it cannot be a "cryptocurrency vault" at the same time. At best, it can only write down the key password of the cold wallet in a certain file.
Is the key the vault password?
Wu Zijia pointed out that it is very likely that the bribe money Shen Qingjing gave to Ke Wenzhe was through a USB containing the cryptocurrency wallet key. The so-called key is actually a string of passwords and can be easily disposed of.
Encryption keys can be divided into "Public Key" and "Private key", and the private key is a string of garbled characters that can prove an individual's ownership of the token.
As long as you have the private key, you have control of the tokens in the wallet address. Therefore, when you change the device to log in to the wallet, you can restore the account by "importing the private key into the wallet".
However, because the private key is too difficult to remember, whether it is written down or photographed to save, there is a certain degree of danger. Therefore, "mnemonic phrases" have emerged to facilitate users to back up and restore private keys. The mnemonic phrase consists of 12-24 words (usually in English). Simply put, it is another form of private key, which is easier for users to remember and enter.
But even if there is a very smart genius who can memorize all 24 words with his brain, there is no need to leave records through USB or text messages. Since the blockchain financial flow is still open and transparent, as long as the cryptocurrency is If you exchange it back to NT dollars and use it, you may still get caught.
What do netizens in the currency circle think?
PTT digital currency moderator DarkerDuck also recently posted a response on the Bagua board, saying that it is not easy to use virtual currencies to hide cash flow today, because most transactions need to go through centralized exchanges, and these exchanges require KYC (customer identity confirmation). And AML (Anti-Money Laundering) mechanism, transaction records will be linked to real identities.
DarkerDuck further pointed out that if Ke Wenzhe really used virtual currency to collect bribes, the money flow would be like Taiwan dollars → exchange → blockchain → specific person’s exchange account → Taiwan dollars, and the entire process would be easily detected by prosecutors.
Assuming that Ke Wenzhe really wants to use cryptocurrency to hide bribes and use a decentralized wallet or cold wallet that does not require KYC, either a flash drive or a cold wallet can be seized by law enforcement agencies. In addition, even if the cold wallet is stored offline in a safe, or even if the hardware is destroyed, there will still be traces of money flow on the blockchain.
As for using cryptocurrency to directly trade goods or services, since there are currently very few merchants in Taiwan that accept cryptocurrency payments, P2P (person-to-person) transactions are no longer easy to achieve in the current regulatory environment. Even "ultimate" solutions such as using anonymous coins (such as Monero) or coin mixers are extremely difficult to operate and difficult for non-technical experts to master.
