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Taiwan's cryptocurrency scene has been rattled by the arrest of David Pan, the founder of ACE Exchange, a prominent cryptocurrency platform.Photo by Timo Volz on PexelsAccording to local media outlet Liberty Times, this development is part of a broader operation targeting fraudulent activities involving 13 additional suspects. Law enforcement authorities, as of now, have confiscated assets totaling around NT$200 million ($6.4 million), dealing a significant blow to the alleged fraudulent operations. A sophisticated fraud schemeThe arrest of Pan, alongside company executive Lin Nan, stems from accusations of a sophisticated fraud scheme orchestrated by the duo, along with their team. The modus operandi involved deceptive tactics, including the use of fake advertisements on popular social media platforms like Instagram and Facebook. Over the past three years, more than 100 investors have reportedly fallen victim to the scheme, losing over one billion yuan ($140 million). Lin Nan, leveraging social media, enticed potential investors with promises of quick wealth through the listing of virtual currencies on well-known exchanges. Simultaneously, David Pan lent credibility to ACE Exchange, fostering trust in the virtual currencies listed on the platform. However, investors soon discovered that the virtual currencies touted as having realizable value were, in reality, "junk coins" with plummeting values or no circulation options. Ace Exchange office raidLegal charges filed against the suspects include fraud under the Criminal Code, the Money Laundering Prevention Act and the Banking Act. Law enforcement agencies in Taiwan conducted multiple raids, including at ACE Exchange offices. Lin Nan's residence yielded NT$111.52 million ($3.6 million) in cash, with additional cryptocurrency seizures bringing the total to over NT$200 million ($6.4 million). In response to the scandal, ACE Exchange has distanced itself, asserting that the arrested individuals are not current employees. The company clarified that Pan had ceased active involvement in daily operations as of 2022. ACE Exchange is actively cooperating with the investigation and has positioned itself as a witness in the case. MOCT delistingDespite the ongoing investigation, ACE Exchange, founded in 2018 and a dominant player in Taiwan's crypto market, continues to operate, upholding regulatory obligations and prioritizing user interests. However, the incident has prompted the platform to announce the delisting of the MOCT-TWD trading pair, effective Jan. 8, in alignment with its commitment to regularly evaluate and delist tokens not meeting stringent criteria. This development occurs amid heightened scrutiny of cryptocurrency exchanges globally. CoinDCX, a major crypto investment firm, recently faced allegations of bank and crypto fraud on its mobile application. Similarly, Lee Jeong-hoon, former chairman of Bithumb, South Korea's major crypto exchange, received an eight-year prison sentence over alleged fraud, awaiting an impending appeal verdict. Taiwan, like Hong Kong, had also been dealing with the fallout from the fraudulent activity of Dubai-headquartered crypto exchange JPEX. David Pan is also the founder of the Dubai-based ZORIXchange cryptocurrency platform. Prior to crypto ventures, Pan worked for KPMG in Taiwan as its COO for startups and innovation. These cases underscore the critical need for comprehensive regulation of the crypto ecosystem. As digital assets gain popularity, the risks of fraudulent activities rise, necessitating collaboration between governments and regulatory bodies to establish and enforce stringent regulations that protect investors and uphold the integrity of virtual crypto exchanges. 

Crypto exchange platform Crypto.com and Triple-A, a company that enables businesses to pay and get paid in digital currencies, both Singapore-headquartered entities, have entered into a partnership to enable direct crypto payments. Simplifying crypto paymentsCrypto.com set out details of the partnership in a press release published to its website on Nov. 21. The firm stated that its partnership with Triple-A will give its global customer base “access to a diverse range of new global merchants.” The duo have set out to simplify crypto payments for both merchants and users alike. Crypto.com users will shortly be enabled in making purchases from a range of e-commerce brands directly, using crypto held in their Crypto.com wallets. Through Triple-A’s input, Crypto.com users will be spared the need to manually convert digital assets to fiat currency before making purchases. Furthermore, users won’t incur a fee for any conversion that takes place behind the scenes.Photo by David McBee on PexelsCashback rewardsOnce launched, with the service initially planned to launch in Singapore before further rollout elsewhere, Crypto.com users will also be in a position to benefit from rewards. Eric Anziani, the company’s president and chief operating officer (COO), spoke to this element of the offering, stating: “Partnering with Triple-A enables us to do this by expanding crypto payments to a range of popular brands, creating a seamless shopping experience and providing an opportunity to earn cashback rewards to make spending crypto even more rewarding.” Volatility protectionAs part of the solution that has been put in place, Triple-A will ensure that merchants aren’t exposed to cryptocurrency volatility in accepting crypto as a payment method. The payments they receive from customers are instantly converted to their local fiat currency, with settlement occurring one day following the transaction. This approach also means that merchants don’t have added difficulties in terms of the tax treatment of cryptocurrencies, their management or related reporting requirements. With that in mind, Eric Barbier, CEO at Triple-A, said that the approach “allows merchants to provide Crypto.com users with an optimized digital currency payment user journey.” Anziani said that Crypto.com is trying to “push boundaries when it comes to integrating crypto payments into real-world scenarios and enhance shopping experiences for [its] users.”  In recent weeks, Crypto.com has been active in pursuing a number of initiatives in order to expand its reach. Earlier this week, the company launched a visa card in Latin America, enabling users within the region to earn rewards on purchases made via the card. On Nov. 14, it emerged that the company had acquired Australia-regulated brokerage firm Fintek Securities. It’s understood the acquisition was made in order to expand the range of financial products that Crypto.com can offer to its customer base. At the end of October, Watchdog Capital, a U.S. Securities and Exchange Commission (SEC)-registered broker-dealer, was acquired by the company.  Like many high profile crypto firms, Crypto.com has had its difficulties with regulators. Following the receipt of a Wells notice from the SEC earlier this year, the company responded by filing a lawsuit against the commission, alleging that the SEC had engaged in regulatory overreach in classifying crypto assets as securities. 

The Securities and Exchange Commission (SEC) of Thailand has initiated legal proceedings against Akarlap Yimwilai, the former director and CEO of Zipmex Thailand. Failure to disclose vital informationThe Commission set out its allegations against Yimwilai in a statement published to its website on Thursday. The allegations revolve around Yimwilai's purported failure to disclose vital information during his tenure, resulting in financial losses for Zipmex customers. According to the SEC's investigation, Yimwilai allegedly transferred cryptocurrency from Zipmex Thailand's wallets to overseas digital wallets without prior disclosure to customers.Photo by Olivier Darny on Pexels Unauthorized digital asset movementsThe SEC's findings indicate that customer assets held in Zipmex Thailand's Z Wallet were moved into overseas digital wallets before any official announcement regarding changes in terms and conditions. This conduct, the regulator asserts, contradicts the information provided by Zipmex Thailand, constituting fraudulent misrepresentation. Yimwilai served as CEO of Zipmex Thailand from August 2018 to November 2023, as per his LinkedIn profile. This deceptive action misled users regarding the security of their assets, the SEC claims, prompting the Commission to charge him with violating Section 82 of the Digital Asset Business Operation Act B.E. 2561. The SEC's accusations extend to Zipmex Thailand's submission of inaccurate reports on customer assets and violations of regulatory requirements. The regulator contends that the reports submitted by Zipmex Thailand were inconsistent with independently verified information. Inviting further legal actionIn response to these allegations, the SEC has forwarded charges against Yimwilai to the Office of the Public Prosecutor (OPP) for further legal proceedings. The SEC has also filed a formal complaint against Yimwilai with the Office of the Provincial Crime Suppression Division, indicating a pursuit of additional legal action. The determination or otherwise of legal liability will be a pivotal step in this process, emphasized by the SEC. Zipmex Thailand, a subsidiary of Singapore-based Zipmex under the leadership of Marcus Lim, obtained approval to operate from the Ministry of Finance and SEC in 2020. The company reportedly came under scrutiny from financial regulators over its acquisition by V Ventures in 2023.  V Ventures backed out of the $100 million buyout of the company last year, which would have included the return of customer deposits. It claimed that Zipmex had not lived up to the terms of the buyout contract.On Feb. 2, the Thai SEC directed Zipmex to temporarily suspend its digital asset trading and brokerage services, granting the firm a 15-day period to adhere to regulatory guidelines. Earlier reports had highlighted Zipmex's application for court protection amidst a wave of bankruptcies among crypto lenders. In November 2023, Zipmex proposed a restructuring plan to reimburse creditors at $0.30 on the dollar, encountering resistance from key stakeholders. The initial offer stood at three cents on the dollar, with the potential to increase to 30 cents in the event of optimized capital recovery.