Taiwan central bank warns of bitcoin risks

January 3, 2014 Leave a comment

Taiwan central bank warns of bitcoin risks

CNA

2013-12-31

Taiwan’s central bank and Financial Supervisory Commission (FSC) on Monday warned the public of the high risks involved with bitcoin transactions, saying that investors will bear full responsibility for any losses themselves.FSC officials said the Central Bank of the Republic of China (CBC) has established that bitcoin — a peer-to-peer virtual currency — does not constitute a currency and that banks certainly should not accept it.

The officials said bitcoin is a highly speculative “virtual product” that lacks a mechanism to protect transactions.

As bitcoin is highly volatile, investors who invest in or trade bitcoins will have to fully assume the trading risks themselves.

The officials also said that financial institutions should be on the watch for money laundering, noting that criminal elements in other countries have been found to have used bitcoin as a tool for drug trafficking, money laundering and smuggling.

The central bank said that after China announced its restrictions on the virtual currency, its price plunged.

The CBC had surveyed regulations on bitcoin from other countries, including China, Indonesia, Thailand, Norway, Denmark, and the United States before making the statement.

In China, where bitcoin transactions are the highest in the world, the price dropped to US$690 on Dec. 25 after peaking on Nov. 29 at an equivalent of US$1,242.

According to the information collected by the CBC, the price of bitcoin was only US$13 earlier this year.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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