Why does Taiwans police force continue to collaborate with the notorious Binance as stated by Legislator Wang Hongwei

Legislator Calls for the Ministry of Justice to Stop Cooperation with Binance
On June 12th, the chairman of the Financial Supervisory Commission (FSC), Thomas Huang, went to the Finance Committee to report on the progress of the “Virtual Asset Special Law”.
During the meeting, Kuomintang legislator Wang Hongwei strongly criticized the Ministry of Justice’s cooperation with the overseas exchange Binance, questioning whether this behavior would “whitewash” Binance’s reputation.
Wang Hongwei pointed out during the questioning that Binance has faced legal penalties in multiple countries, including the United States, Canada, and India. Its involvement in money laundering and fraud has made it notorious internationally. Even the founder of the exchange, Changpeng Zhao, was sentenced in the United States for related crimes. However, since last year, the Ministry of Justice and the judicial authorities have been cooperating with Binance to organize seminars on new forms of crimes such as cryptocurrencies. Wang Hongwei questioned whether this cooperation was helping Binance “whitewash” its image.
In response, Chien Mei-hui, Deputy Director of the Department of Prosecution at the Ministry of Justice, stated that the cooperation with Binance and other virtual asset exchanges is necessary to obtain the necessary financial and transaction data for cases. She emphasized that this cooperation is crucial, and Binance has indeed provided the required information in certain cases.
However, Wang Hongwei was dissatisfied with the explanation from the Department of Prosecution and pointed out that by simply searching Binance on the internet, one can find information related to fraud. She criticized the Ministry of Justice’s cooperation strategy and strongly urged them to stop cooperating with Binance. She openly questioned whether Taiwan should be promoting this kind of cooperation with an international fraud group.
“You are simply doing it wrong, and you are still stubborn. Stop cooperating with Binance! Stop this embarrassing behavior internationally!”
Taiwan is indeed a fraud island! These overseas frauds come directly to Taiwan to launder their money? It truly is an undisputed fraud island. Should we promote this to the world?
Why cooperate with Binance?
Legislator Wang Hongwei’s strong statements have drawn attention from the meeting and the cryptocurrency community. However, are her two main points, “Binance’s notorious international reputation” and “Taiwan should stop cooperating with Binance,” really reasonable?
Why cooperate with Binance exchange?
Although the methods of cryptocurrency fraud are diverse, the anonymity and cross-border nature of cryptocurrencies make it extremely difficult to trace and locate fraudsters. However, whether it is fraud through exchange wallets or on-chain personal hot wallet addresses, as long as fraud groups want to withdraw these digital assets, they must ultimately go through an exchange to convert these cryptocurrencies into fiat currencies such as USD or NTD.
In simple terms, exchanges are often the last stop for investigating cryptocurrency cases on the blockchain.
When users discover that their assets have been defrauded, they can only cooperate with the police and domestic exchanges to freeze the accounts. Since exchanges require users to undergo KYC identity verification during registration, the police can know “who withdrew the stolen funds” during the investigation, and then trace the members of the criminal group.
Although domestic exchanges cooperate with Taiwanese police and judicial authorities, many users use overseas exchanges such as Binance and OKEx. The Financial Supervisory Commission of Taiwan has not yet formulated a joint defense mechanism for virtual currency fraud funds. Therefore, the cooperation between overseas exchanges and Taiwanese law enforcement agencies is limited, and many exchanges are unwilling to cooperate with Taiwanese law enforcement agencies.
Further reading:
Scammers defrauding 5.3 billion NTD a year, can’t they be caught? Criminal Investigation Bureau reveals 4 major case challenges
The number of users on the Binance exchange platform recently exceeded 200 million, making it the most widely used exchange globally. In recent years, it has actively provided assistance in judicial cooperation by providing KYC information and assisting in criminal investigations.
From this, it can be seen that Binance’s assistance is crucial for Taiwan’s investigation of cryptocurrency fraud cases. If Taiwan stops cooperating with Binance, it will undoubtedly deepen the challenges faced by law enforcement agencies, and the rampant problem of cryptocurrency fraud will not be able to find a good solution.
Is Binance really “evil”?
Binance founder Changpeng Zhao reached a comprehensive agreement with the US Department of Justice on November 22, 2023, admitting to criminal charges of money laundering and violating US sanctions. After stepping down as CEO, Zhao paid a fine of $50 million.
Before his sentencing, Zhao said, “I believe this is the first step in fully acknowledging mistakes and taking responsibility. Here, I failed to establish a ‘KYC identity verification’ system completely. I also understand the importance of having a robust KYC and anti-money laundering program. That’s why I instructed Binance to cooperate with the US investigation.”
According to Wen Hongjun, the founder of the exchange BitYacht, in a Facebook post, “In the past, Binance relied on regulatory arbitrage (non-compliance) to grow aggressively and become the world’s largest cryptocurrency exchange. As a result, it also bears the heaviest burden. Setting aside the personal Chinese background of Changpeng Zhao and the inconsistency with mainstream American values, it is indeed undeniable that the Binance platform has solid evidence of not reporting numerous money laundering transactions and terrorism financing records over the years,” Wen Hongjun added, “In other words, Binance is entering a period of repayment.”
Due to Changpeng Zhao’s active cooperation with the US government, he received a good record and ultimately, in May 2024, a US judge handed down a lenient sentence of four months, officially concluding this globally-watched case.
Although Binance did make mistakes, its past dark history does not mean that the exchange is still “evil” now.
Binance stated, “These agreements acknowledge our company’s responsibility for past violations of criminal compliance,” but also emphasized that the company has invested a significant amount of resources in compliance. In recent years, Binance has actively cooperated with regulations in various countries and has obtained regulatory licenses in 18 different jurisdictions worldwide, making it the exchange with the most licenses in the industry.
In addition, Binance has implemented law enforcement training programs globally to help law enforcement personnel understand blockchain, cryptocurrencies, and other related knowledge, as well as enhance their investigation skills. These efforts have received positive feedback.
It can be seen that Binance has placed significant importance on “protecting user asset security” and “promoting the healthy development of the industry” in recent years. In many international and cross-border major cases, it has become the police’s “best assistant” in solving cases and recovering defrauded assets.
With the popularity and widespread use of cryptocurrencies, related fraud cases have increased sharply worldwide, and Taiwan is no exception. Blockchain fraud cases constantly shift between physical, virtual, and cross-border boundaries, making it even more challenging. Therefore, establishing a cross-border joint defense network will become more important.