Crypto crime continues to rise globally, and Taiwan is no exception.
In a recent AMA (Ask Me Anything) session, Charlie Chen, Secretary of the Taiwan Virtual Asset Anti-Money Laundering Association (TVA3) and CEO of Chainvestigate, shared his insights into the challenges faced by law enforcement and compliance professionals in Taiwan when dealing with cryptocurrency-related crimes.
Charlie’s work with Chainvestigate and collaboration with Crystal Intelligence has positioned him at the forefront of crypto investigation in Taiwan. His discussion highlighted key aspects of Taiwan’s crypto crime landscape, the difficulties investigators encounter, and how training programs are bridging knowledge gaps in this ever-evolving field.
In this blog, we summarize the key takeaways from the conversation and explore the future of crypto crime investigations in Taiwan.
Crypto crime in Taiwan: an alarming rise
Crypto crimes, including fraud, scams, and money laundering, have been steadily increasing in Taiwan.
Charlie noted that in 2022 alone, over 11,000 confirmed cases of crypto fraud were reported, accounting for a substantial percentage of the total fraud in Taiwan. Interestingly, the monetary losses due to crypto crimes increased from $7 billion NTD in 2022 to nearly $9 billion NTD in 2023, a figure that continues to climb as cryptocurrencies gain wider adoption.
The typologies of crypto crime are diverse. According to Charlie, the most prevalent fraud types in Taiwan include “pig butchering” scams, where fraudsters build long-term relationships with victims before manipulating them into investing in fraudulent schemes, and e-commerce scams, where scammers lure victims with promises of high returns through cryptocurrency investments. These types of scams prey on individuals’ emotions and financial vulnerabilities, making them particularly challenging for law enforcement to address.
The gaps in Taiwan’s Law Enforcement
One of the most significant issues highlighted by Chen is the gap in skills and knowledge within Taiwan’s law enforcement agencies.
Local police stations, which are often the first point of contact for victims, typically lack the specialized training required to investigate crypto-related crimes effectively. While larger institutions like the Criminal Investigation Bureau (CIB) and the Ministry of Justice Investigation Bureau (MJIB) are more equipped to handle such cases, local authorities struggle with the complexity of tracing blockchain transactions, often concluding that the stolen funds have left the country and are irrecoverable.
Chen emphasized the need for increased training and collaboration between local law enforcement and international bodies. He also pointed out the importance of compliance and transaction monitoring tools, such as those offered by Crystal Intelligence, in bridging these gaps.
Properly using these tools can significantly enhance an investigator’s ability to track down suspects and recover stolen assets, yet many in Taiwan’s law enforcement community have yet to receive adequate training on their use.
Navigating Taiwan’s Regulatory Landscape
Taiwan’s regulatory framework for virtual asset service providers (VASPs) is still developing, which presents another challenge in combating crypto crime. While the government has made strides by incorporating VASPs into its anti-money laundering regulations and launching guiding principles for the industry, many of these regulations remain suggestions rather than enforceable laws.
For example, the 2023 guiding principles cover areas such as customer protection, information security, and the separation of customer and company assets, but they do not yet have the legal backing to compel compliance.
Charlie revealed that more concrete regulations, including a comprehensive law governing VASPs, are expected by 2025.
In the meantime, Taiwan’s Financial Supervisory Commission (FSC) has implemented a de facto registration system for VASPs, which requires businesses to comply with the existing anti-money laundering laws before they can operate.
However, the slow pace of regulatory development leaves many gaps for bad actors to exploit, complicating the efforts of legitimate VASPs and law enforcement alike.
The role of training in building a safer crypto environment
To address these challenges, Charlie is working closely with Crystal Intelligence to launch a specialized training program aimed at crypto compliance officers, investigators, and legal professionals in Taiwan.
The course, set to begin in October, is designed to equip professionals with the skills necessary to investigate crypto-related crimes and monitor suspicious transactions.
The training will cover critical areas such as using blockchain analysis tools, identifying fraud typologies, and understanding international regulatory standards.
As Charlie pointed out, many of Taiwan’s top crypto exchanges and financial institutions lack personnel with the expertise to handle complex crypto investigations. This program aims to fill that gap by providing hands-on training with tools like Crystal Expert, an industry-leading solution for tracing crypto transactions and assessing risk.
Charlie stressed the importance of education in this space, noting that the fight against crypto crime is as much about staying ahead of evolving criminal techniques as it is about reacting to existing fraud.
With scams becoming more sophisticated and criminals learning to obscure their tracks on the blockchain, continuous education and training are essential for professionals in the industry.
Building a stronger defense against crypto crime
Taiwan’s crypto crime landscape is complex and constantly evolving, with rising fraud cases and a regulatory framework still in its early stages.
However, through collaborative efforts between organizations like TVA3, Chainvestigate, and Crystal Intelligence, progress is being made. Charlie’s insights highlight the need for greater awareness, stronger regulations, and, most importantly, comprehensive training for law enforcement and compliance professionals.
As crypto adoption continues to grow, so too will the risks associated with it. The upcoming training program is a critical step in empowering professionals to combat these risks and protect both individuals and businesses from falling victim to crypto crime.
Stay ahead of crypto crime by enrolling in our specialized training program for investigators and compliance professionals. Learn how to use cutting-edge tools like Crystal Expert to trace transactions and monitor suspicious activity.
