Taiwan crypto world KOL in trouble! Encryption Hu Shi was warned for illegal solicitation, lawyers teach two tricks to avoid crossing the line.

The Securities and Futures Bureau has issued a warning notice regarding 'encryption胡適'.

The Securities and Futures Bureau of the Financial Supervisory Commission issued a warning notice yesterday (12/17) against the well-known virtual currency internet celebrity 'encryption Hu Shi' and its operating company, Yangji Limited Company, pointing out that the operator has not completed the anti-money laundering compliance statement and is not allowed to engage in solicitation activities related to virtual currency businesses. This is the first KOL (Key Opinion Leader) to be warned since the implementation of the virtual asset registration system this year.

Source: Securities and Futures Bureau, Financial Supervisory Commission. Non-FSC approved securities and futures firms and product warning zone.

According to the announcement of the Financial Supervisory Commission, Yangji Co., Ltd. has not completed relevant registration in accordance with the "Registration Measures for Businesses or Personnel Providing Planned Virtual Asset Services for Anti-Money Laundering", nor has it made an anti-money laundering compliance statement to the Financial Supervisory Commission. Therefore, it is prohibited from conducting any virtual currency platform business solicitation activities. The Financial Supervisory Commission reminds investors to avoid conducting virtual currency transactions with the company and not to remit funds to its account.

According to the company registration information, Ocean Quest Limited is located in Xinzhuang District, New Taipei City, established in March 112, with a capital of 200,000 New Taiwan Dollars, mainly engaged in retail and wholesale, international trade, and consulting services. However, the company has not applied for a license for virtual asset-related business, which is clearly inconsistent with its actual operation of virtual currency business.

Image source: Taiwan Company Network. Yangji Co., Ltd. has not applied for a license for virtual asset-related business, which obviously does not match its actual operation of virtual currency business.

KOL Recommends Controversial Cryptocurrency Course

In addition, Hu Shi conducts daily technical analysis and provides virtual currency investment courses through social media, YouTube channels, and other online platforms. The course fees are divided into elementary class 6,200 yuan/year, intermediate class 9,300 yuan/year, and advanced class 15,500 yuan/year. Although these contents are labeled as 'simulated gold operation, not investment advice', they still attract many followers to join.

However, the Securities and Futures Bureau pointed out that if such courses and services involve businesses related to virtual asset trading platforms, they must complete registration and declaration procedures in accordance with the law. Engaging in related activities without approval is a violation of current regulations and may face further investigation and punishment.

In addition to the course, Hu Shi will also share market trend analysis in the video, such as the recent discussion of the long-term target price range of Litecoin ($LTC), which has prompted some users to follow suit. Despite his repeated declaration that his content is for reference only, it may still touch legal boundaries.

Image Source: 'encryption胡適' Fan Page

Industry Turbulence and Investor Vigilance

This incident not only reveals the challenges of law enforcement and regulation in the virtual asset market, but also casts a shadow over the trust of investors in "KOL recommendations". As the virtual currency market develops rapidly, related risks are gradually emerging. How to balance innovation and regulation has become a common issue faced by countries.

The FSC emphasizes that investors should avoid participating in unapproved virtual currency businesses and can check the list of legal operators on the website of the Securities and Futures Bureau. Operators engaged in virtual currency-related activities must follow the anti-money laundering registration program to ensure the transparency and security of market operations.

As for whether 'encryption Hu Shi' will be subject to legal investigation, the industry is concerned about whether it can complete relevant statements and continue to operate. However, this incident has sounded the alarm for other virtual currency KOLs, reminding operators to comply with the law to avoid damaging their reputation and business development due to legal risks.

"Encryption City" Legal Tips

Due to the concerns of most people about whether KOL promotion of cryptocurrencies involves encryption, the previous "Encryption City" also compiled a "Taiwan Virtual Asset Self-Regulatory Norms Lazy Package", which interested readers can refer to. Regarding this incident, we also asked our own legal counsel the following three questions for reference, hoping that readers will not face legal disputes due to crossing the line.

Where can readers see relevant announcements?

Currently, only the announcement for handling (warning special zone content) is available, but the industry currently believes that Hu Shi may be involved in violations of the Futures Trading Act and the Securities Investment Trust and Consulting Act. Also, due to involvement in criminal cases, it is currently impossible to verify (investigation is confidential).

From the perspective of legal professionals, how do they view this matter?

According to the current information, '', operators who have not registered cannot engage in, solicit, or conduct virtual currency platform business activities. It is necessary to be approved by the competent authority to distinguish the work affairs belonging to the exchange, and the business activities of Hu Shi's solicitation can be explained as the extension of the exchange business. This extension requires registration under the 'Regulations for Anti-Money Laundering Registration of Businesses or Personnel Providing Virtual Asset Services'. Of course, it cannot be ruled out that Hu Shi is soliciting business for unapproved exchanges, and the red line is drawn here.

Virtual currency platform (domestic virtual asset platform and trading), refers to the business of others engaging in the following activities

Exchange between virtual assets and New Taiwan dollar, foreign currency, and currency issued in mainland China, Hong Kong, or Macau.

Exchange between virtual assets.

Transfer of virtual assets.

Manage and store virtual assets or provide related management tools.

Participate in and provide financial services related to the issuance or sale of virtual assets.

3. Are there any precautions or suggestions to be aware of?

If the business model involves virtual assets, transactions should be conducted through compliant exchanges to avoid direct solicitation or obtaining of consideration from the exchange; it is necessary to determine whether the cooperating exchange complies with government supervision mechanisms, and evaluate carefully. It is currently recommended to cooperate with compliant exchanges.

【Disclaimer】There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Investment based on this is at your own risk.

'Taiwanese currency circle KOL incident! encryption Hu Shi was warned for illegal solicitation, lawyer teaches 2 ways to avoid crossing the line.' This article was first published in 'encryption City'