Just days after a Hong Kong tycoon was kidnapped, beaten, and held for millions of dollars in Bitcoin in ransom by criminals, the Financial Supervisory Commission (FSC) Chairman of Taiwan, Tseng Ming-chung, has made a ruling. Bitcoin is now illegal within Taiwan.
Financial Interest Decide What is Illegal, Then Tell Police the New Law
In many developed countries, a separate government body, like a Parliament or Congress, would create laws after a vetting process of checks and balances, with a somewhat legitimate voting process. The banking interests are presumed to control the action from behind closed doors. Not in Taiwan apparently, where the FSC, similar to the Securities and Exchange Commission (SEC) in the United States, has decided on its own that Bitcoin will no longer be allowed to be transmitted in Taiwan. The legislative controlling position of the financial industry is very clear and open in Taiwan.
According to Focus Taiwan News, Tseng said in a hearing Monday that Bitcoin was illegal and he pledged that the FSC would work with the country's Central Bank and police to crack down any illegal activity. The FSC will also publish a statement jointly with the central bank to inform other countries of such regulations. This is tantamount to the SEC in the United States holding a press conference and saying: “Bitcoin is now illegal. We’ll tell federal law enforcement and the Federal Reserve what to do next regarding its future use.”
As CoinTelegraph recently reported, this FSC action follows the kidnapping of 68-year-old Pearl Oriental Oil chairman Wong Yuk-Kwan. According to the latest information on this case, the tycoon was allegedly abducted on September 20, then shackled and held for 70 million HK dollars, or over US$5M. He was in captivity until October 27, when he was rescued in a rare joint operation between Hong Kong and Taiwan police, who said no ransom money was paid by the Yuk-Kwan family countering previous that a bitcoin was sent to the kidnappers.
Taiwan authorities believe one of Taiwan's biggest organized crime groups, the United Bamboo gang, was hired by persons unknown to snatch the businessman. Fifteen United Bamboo gang members have been arrested in association with this case. Sources say two of the suspects ventured to Hong Kong to collect the ransom money but were unsuccessful. They were followed by law enforcement back to houses in Taiwan, where Yuk-Kwan was held captive.
The captors stayed in contact with the Wong family via email, and sent videos of Yuk-Kwan in distress, having him confirm and make demands of the family. One transmission was from October 22, where he said the following to his daughter:
"My dearest daughter, it is Daddy. Today is October 22, 2015, on Thursday. Please come to help mum remit the remaining amount [of ransom] tomorrow. Stay strong. Wait for my return."
Yuk-Kwan is currently out on bail in his own criminal case, which has been adjourned until December 9. He is under suspicion of fraud and money-laundering in relation to the acquisition of an oil field within the United States.
The only loser here is Bitcoin and the innocent people of Taiwan
So to summarize, a crime against a billionaire means huge potential ramifications for the Taiwanese Bitcoin community. Wong Yuk-Kwan is safe and sound, receiving medical treatment for some facial injuries while awaiting trial in his own criminal case. No Bitcoin or money from the Yuk-Kwan family was lost to gangster criminals, who were apprehended. Yet, the people of Taiwan can theoretically no longer use Bitcoin, just because it was mentioned as means to an end by criminals looking for a ransom payment, which they never received.
How Taiwan banking and law enforcement authorities plan to ban the transmission of bitcoin, which cannot be physically held, and can be sent digitally through smartphones, apps, websites, and the black market is as yet unknown.