The Financial Supervisory Commission says it has no jurisdiction over FTX and it can't do anything to help investors that suffered major losses when FTX filed for bankruptcy. The Ministry of Finance, meanwhile, says anyone that declared crypto income can write off crypto losses.
Many investors were hit hard when cryptocurrency exchange FTX filed for bankruptcy last week, including an estimated 500,000 investors in Taiwan. Crypto investors in Taiwan have formed a self-help association and are speaking out.
FTX Investor: “I chose FTX because it was the second-largest cryptocurrency exchange in the world and because it provided 5-8% interest. It also didn't charge for withdrawals.”
FTX Investor: “I put in around US$100,000. I didn't move it around much. So, I've been wiped out.”
Although FTX's 29-year-old founder, Sam Bankman-Fried, says customers will be repaid, his net worth has plummeted from US$1.6 billion. FTX has shut down withdrawal functions and is warning customers against putting more funds into their accounts. Taiwan's Financial Supervisory Commission says FTX is an offshore entity and it has no jurisdiction, so there's nothing it can do for Taiwanese investors. One lawyer in Taiwan says under U.S. bankruptcy laws, creditors have to formally put in a claim to get any money back.
Eddie Hsiung, Lawyer: “Tell them, "I'm a creditor." In the future, as I just said, if the Chapter 11 filing is approved and they can sell off their assets, whatever is left can be claimed by the creditors.”
The Ministry of Finance says companies that listed crypto assets in their balance sheets can write off their losses, while individuals can deduct their losses from offshore earnings in the same tax year when filing their alternative minimum tax, as cryptocurrency losses are categorized as offshore losses.