Taiwan's central bank has released a warning on crypto asset fraud which is becoming one of the nation's major investment fraud crimes, with potential victims asked to buy cryptocurrencies using bitcoin automated teller machines (BTMs).
The warning was detailed in a report which the bank released after its quarterly policymaking meeting on March 17. The bank dedicates a chapter in the report to describing the development and risks of BTMs, as well as the supervision and management issues concerning its emerging use in international markets.
In Taiwan, crypto asset fraud has become a major type of investment scam. In some cases, victims were defrauded while transferring their money to certain accounts when using a BTM to buy e-crypto assets, the central bank said, cautioning people about the risks in the sector.
The central bank stated that since bitcoin was invented in 2009 as a digital or virtual currency that uses peer-to-peer technology to facilitate instant payments, various crypt asset types have mushroomed around the world to more than 18,000 nowadays.
The channels to secure crypto assets have also become more diverse given the abnormal surge in crypto prices in recent years, and the rapid development of encryption systems, such as stablecoins, which are cryptocurrencies where the price is designed to be pegged to a cryptocurrency.
There are also so-called decentralized finance (DeFi), an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies; and non-fungible tokens (NFT), which can digitally represent any asset, including online-only assets like digital artwork and real assets such as real estate, the central bank said.
Moreover, acquiring crypto assets is no longer limited to computer experts now that ordinary people are able to get their hands on cryptocurrencies in a convenient way, the bank said, referring to the BTM, which was introduced to the market in 2013.
BTMs, which feature an interface similar to ATMs that is familiar to many people around the world, allow people to buy crypto assets with cash, the central bank noted.
As cryptocurrencies like bitcoin have become more mainstream over the past few years, the number of BTM installations has grown quickly. However, while investors can easily purchase cryptocurrencies, they are also exposed to higher risks because such installations have not yet been placed under the supervision of the authorities, the central bank warned.
Citing Coin ATM Radar statistics, the bank said there are 25 BTMs in Taiwan -- nine in Taipei, two in New Taipei, four in Taoyuan, one in Hsinchu County, four in Taichung, three in Tainan, and two in Kaohsiung -- which is the 25th most in the world.
However, no decision has yet been made within the government about which agency should take charge of the supervision of crypto assets in the nation, the central bank said.
But when it comes to matters like fighting money laundering and terrorism financing, these are under the purview of the Financial Supervisory Commission, the top governmental body responsible for regulating securities markets, banking, and the insurance sector, the bank added.
The central bank pointed out that criminals have been found exploiting BTMs for easier illicit activities, including money laundering, due to the insufficient supervision of such installations, according to warnings from the relevant authorities of other countries.
Source: Focus Taiwan News Channel