The cryptocurrency market has faced a series of devastating blows recently, shaking investor confidence globally. In response, Taiwan's BITGIN Exchange has partnered with KGI Bank to establish a trust-based custody system for user funds - a move aimed at restoring trust in virtual asset investments.
The Cryptocurrency Market Crisis: FTX Collapse and Beyond
The bankruptcy of FTX - once the world's second-largest cryptocurrency exchange - left countless investors facing total losses, unable to withdraw their digital assets. This was quickly followed by Core Scientific, one of America's largest crypto mining firms, filing for bankruptcy protection on December 21.
Statistics reveal Taiwan ranked 7th globally in FTX user activity, with approximately:
- 80% of affected investors losing around NT$1.5 million
- Some major accounts suffering losses up to $7 million USD
"Crypto investors must now be hyper-vigilant about platform risks," warns one financial expert. "Unregulated overseas exchanges promising unrealistic returns warrant particular caution."
Taiwan's Proactive Approach: Trust Accounts for Asset Protection
With cryptocurrency regulations still evolving in Taiwan, BITGIN Exchange has taken preemptive measures by:
- Partnering with KGI Bank for NT Dollar trust custody
- Implementing complete segregation between user assets and operational funds
- Establishing transaction-based fund movements under bank supervision
How the Trust Account System Works
👉 Discover how trusted custody protects your crypto investments
- User deposits are held in dedicated KGI trust accounts
- Fund movements occur only per user transaction instructions
- Company funds are maintained separately with no access to client assets
"Proper oversight benefits all stakeholders," emphasizes BITGIN CEO Chang Han-lin. "We recommend beginners start with domestic exchanges for greater transparency and trust-backed security."
Supporting Affected Investors: Financial Relief Programs
Recognizing the hardship faced by many in the crypto community - including delivery drivers who invested significantly - BITGIN and KGI Bank have launched:
- "Quick Repayment Loan" program for short-term funding needs
- Special $16.8 USD bonus for delivery personnel registering with verification
- Enhanced asset protection across all user tiers
Frequently Asked Questions
Q: Why choose a domestic exchange over international platforms?
A: Local exchanges offer better regulatory oversight, transparent operations, and trust-account protections that many overseas platforms lack.
Q: How does the trust account actually protect my money?
A: Your NT Dollars remain securely held by the bank until you initiate transactions, completely separate from the exchange's operational funds.
Q: What happens if the exchange goes bankrupt?
A: Unlike FTX where user funds were commingled with company assets, trust accounts ensure your money remains protected and accessible.
Q: Are cryptocurrency investments still safe?
A: While all investments carry risk, using regulated platforms with proper custody solutions significantly reduces exposure to exchange failures.
Q: How can I verify my funds are really in a trust account?
A: Reputable exchanges provide transparency through regular audits and allow verification procedures with their banking partners.
👉 Learn more about secure crypto trading practices
Moving Forward: Building a More Resilient Crypto Ecosystem
As the industry matures, Taiwan's approach combining financial institution partnerships with progressive regulation offers a blueprint for sustainable growth. While challenges remain, these trust-building measures represent crucial steps toward stabilizing the market and protecting investors in volatile times.