In response to a recent high profile kidnapping case that involved Bitcoin as the platform for ransom demands, the Chairman of the Financial Supervisory Commission of Taiwan has declared Bitcoin illegal in the country. This is a blow to many as Taiwan had wide spread adoption of the digital currency, with over the counter sales of Bitcoin common in convenience stores until now.
The Chairman, Tseng Ming-Chung, has deemed any use of Bitcoin within the country an illegal act, and would seek to act upon what are now illegal activities that use the digital currency.
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Tseng Ming-Chung, the Chairman of the Financial Supervisory Commission of Taiwan has declared the use of Bitcoin within Taiwan illegal. The announcement comes as a response to a recent very high profile kidnapping case involving a prominent Hong Kong businessman who was taken by a criminal gang. They subsequently demanded HK$70 Million (US$ 10 million) in ransom to be paid in Bitcoin (about 30,000 BTC value), with the victim being rescued after a payment of 4,800 BTC, or about HK$13 million (US$ 1.6 million).
Further to this, he also noted that the Financial Supervisory Commission would work in conjunction with the central bank and various law enforcement agencies to ensure that those flouting the new law would be brought to justice. They also said that in due course the FSC and central bank will be publishing a joint statement to inform other countries of the new regulations and how this affects dealings with Taiwan.
This new ruling will have a detrimental effect on many, Taiwan is a famously early adopter of technology, and Bitcoin has been no exception. Many convenience stores have offered over the counter purchase of Bitcoin for a while, and it has become quite widely accepted as a payment across the country.
For those in Taiwan who regularly use Bitcoin this is an obvious blow, as it is to the wider user base, but if we look at the reasoning behind this it appears to be somewhat reactionary and unlikely to solve anything. Kidnappings happened before Bitcoin appeared and they will undoubtedly happen after this announcement. As a result, this merely punishes the innocent Bitcoin users of Taiwan. Criminals already engaged in criminal activity will obviously not balk at breaking another law by continuing to use Bitcoin.
To many, the Taiwanese response to this incident certainly seems to miss the mark. The fact remains that the motivations for the kidnapping are still under investigation, and the crime itself seems to have had nothing to do with Bitcoin – other than the fact that the criminals chose that as their medium of exchange. Moreover, even if they had demanded to be paid in New Taiwan dollars, it is difficult to see how things would have turned out differently. The victim would have still been rescued using the same procedural tactics. The only difference is that no one in the Taiwan government would have called for outlawing the nation’s currency simply because one group of criminals chose it as their preferred form of ransom payment.
Given the island’s apparent fondness for Bitcoin, it is difficult to imagine this decision having any real lasting impact. For now, however, cryptocurrency advocates in Taiwan and elsewhere can only wait to see whether clearer heads ultimately prevail.