Recently, in addition to the surge in ETFs, investors in Taiwan have also been paying attention to the rise of cryptocurrencies. However, after Bitcoin showed a downward trend this week, the Financial Supervisory Commission (FSC) issued a public announcement, urging the public to carefully assess the risks of participating in cryptocurrency asset trading.
(Previous update: Bitcoin continues to plummet! It hits a two-week low of 61,500, and over 220,000 people have lost over 700 million US dollars in liquidation.)
(Background information: How much is the actual circulation of BTC? Will Bitcoin ETF “buy out” the market?)
Recently, not only has Taiwan witnessed a surge in ETFs, but many investors have also been attracted by the upward trend of cryptocurrencies this year. From initially having a wait-and-see attitude, they are now considering entering this market. In light of this, the FSC issued a public announcement today (20th), urging the public to carefully assess the risks of participating in cryptocurrency asset trading.
No intrinsic value, use overseas platforms cautiously
In the announcement, the FSC emphasized that virtual assets are highly speculative and not real currencies. They have no intrinsic value, and their transaction prices have no upper or lower limits, making them prone to sharp fluctuations. Therefore, the trading risks are extremely high. The FSC advised the public to fully understand how it operates and carefully evaluate the risks they may face before engaging in related transactions.
Furthermore, the FSC specifically pointed out that for individuals who trade through overseas virtual asset trading platforms, they should be aware that these platforms may not be regulated by Taiwan or foreign laws, and the relevant trading information may not be transparent enough. Therefore, the FSC recommends that individuals exercise even greater caution.
However, the FSC’s warning seems to have come late during the rise of Bitcoin. The FSC did not issue any relevant warnings when the price of Bitcoin was soaring, but only raised risk alerts when Bitcoin showed a downward trend this week. The FSC’s choice of timing has indeed raised doubts among the cryptocurrency market community, questioning whether the FSC’s position and timing in relation to virtual asset price volatility are appropriate.
BTC investment beats “time deposits” banned?
It is worth noting that on March 18th, FSC Chairman Huang Tien-mu went to the Finance Committee to give a special report and responded to questions. Regarding the promotion by internet celebrities of “mortgaging assets to prevent buying ETFs,” Huang Tien-mu stated that this approach is very risky, and the rise and fall of ETF component stocks are not determined by the issuing institutions. Past performance increases do not guarantee future increases.
Huang Tien-mu revealed that the Investment Trust and Consulting Association is currently working on enhancing self-regulatory norms for the management behavior of investment trust companies and fund sales organizations in relation to internet celebrities. In order to cool down the trend of the massive inflow of funds into ETFs, in the future, internet celebrities will not only have to disclose slogans such as “sponsored by XYZ company” explicitly but may even be prohibited from mentioning “beating time deposits” and “annual dividend yield” in their advertising.
On the other hand, regarding virtual asset platforms, Huang Tien-mu stated that there are currently no regulations that can restrict internet celebrities from endorsing virtual assets. However, the FSC has outsourced research on specialized legislation for virtual assets, and it is expected that the draft legislation will be released after September this year. The FSC will then refer to international practices and consider whether the draft legislation this year should also prohibit internet celebrities from mentioning the “annual dividend yield” of cryptocurrencies.
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