During the Legislative Yuan Q&A session on December 19, Kuomintang legislator Justin Sun questioned Financial Supervisory Commission (FSC) Chairman Teng-lung Peng on the phenomenon of the US announcing interest rate cuts but triggering a stock market crash. The discussion covered global stock market dynamics, the attractiveness of the crypto market for capital, and Taiwan's regulatory policies on decentralized finance (DeFi) and virtual assets.
Legislator Justin Sun questioned the phenomenon of crypto companies receiving USDT and offering high-yield products, alleging "suspected fund-raising." Chairman Peng responded that the FSC will include debt-type wealth management products in the content of next year's dedicated law, and will also formulate regulations for DeFi, sparking discussion.
Table of Contents
ToggleInterest rate cuts fail to boost the stock market, legislators puzzled
Justin Sun pointed out that according to general economic logic, the US interest rate cut should be a bullish signal for the stock market, but it instead led to a crash of over 1,000 points. He hoped that Chairman Peng could provide a professional analysis of the main reasons. Peng stated that the market's expectations for the pace of rate cuts were disappointed, coupled with uncertain international political factors, the year-end investment holiday effect, and the impact of US inflation and tariff policies, all of which may have led to violent stock market fluctuations. He further mentioned that the low expectations for future interest rates in the "dot plot" may also be one of the reasons for the market's lukewarm response.
Is capital flowing into crypto?
During the questioning, Justin Sun mentioned that some views believe that capital is flowing from the traditional market to the crypto market, which may be one of the reasons for the reduction in stock market capital. He mentioned that the recent surge in the price of BTC has attracted the attention of the capital market. Peng responded that although the trading volume of crypto is still at a low level compared to the traditional financial market, the growth rate is amazing, and Taiwan has also observed an increasing attraction of virtual assets.
DeFi products challenge regulation: Is there suspected fund-raising?
Justin Sun specifically pointed out that exchanges use stablecoins (such as USDT) as the basis to provide short-term fixed interest rates of 4.5% to 5.5%, claiming "guaranteed profits." He believes that such products are similar to past fund-raising incidents and questioned whether the FSC has regulatory responsibilities.
Peng responded: "This is the so-called DeFi part." DeFi-related transactions are currently within the FSC's regulatory scope, but the specific regulations are still being formulated. He revealed that the FSC will hold a public hearing on the virtual asset management dedicated law in January 2025 and submit it to the Executive Yuan for review in June.
Crypto circle promotes wealth management products, unfair to compliant third-party payment providers
Justin Sun stated: "There are some rules that we need to define. For third-party payments, for example, on a certain platform, I put 10,000 there, I used 2,000 to buy something, and the remaining 8,000 is invested, and he gives me a fixed interest rate of 4%. Is this allowed? You said it's not allowed for third-party payments in the past, but now the crypto companies can do it, which is very strange."
Peng responded: "I didn't say it's allowed." He stated that this is an evolving thing globally, and the future dedicated law will include discussions on this.
Virtual asset dedicated law: Clearly define market behavior
Regarding the future direction of crypto regulation, Peng stated that the virtual asset dedicated law will cover transaction regulations, institutional management, consumer protection, and other aspects, and strive to ensure the rights and interests of investors. He emphasized that legal trading behavior must comply with regulations, and the goal of the dedicated law is to allow the development of emerging financial technology on a legal and compliant basis.
In the end, Justin Sun emphasized that the public has high expectations for the FSC, believing that the FSC should take responsibility for all areas involving financial transactions. Peng responded that not all financial transactions fall under the FSC's jurisdiction, but they will strengthen cooperation with other departments to ensure the stable operation of the market.
Risk Warning
Crypto investment is highly risky, and its price may fluctuate violently, and you may lose your entire principal. Please carefully evaluate the risks.
The recent controversy over Coinbase's delisting of wrapped BTC (WBTC) has taken a new turn. On 12/18, a US federal court ruled to deny the temporary restraining order requested by WBTC custodian BiT Global against Coinbase, and allowed Coinbase to proceed with the planned suspension of WBTC trading on 12/19. The court stated that BiT Global failed to provide sufficient evidence to prove that the delisting action would cause "immediate and irreparable harm," which led to the denial of the restraining order.
Table of Contents
ToggleThe origin of the delisting dispute, Justin Sun participated in the management of WBTC
According to reports, previously Coinbase announced on 11/19 that it would completely stop WBTC trading by 12/19, which caused dissatisfaction from the custodian BiT Global. BiT Global escalated from emotional appeals to taking legal action, and filed a lawsuit against Coinbase on 12/13, claiming that Coinbase's decision would cause "immediate and irreparable harm" to WBTC holders.
However, in Coinbase's response on 12/17, it stated that the reason for delisting is that BitGo, the main reserve custodian of WBTC, announced in August this year that it would collaborate with BiT Global to share the management of WBTC. TRON founder Justin Sun also participated in the management, and pointed out that Sun has been accused of fraud and market manipulation in the US, making WBTC's risk uncontrollable. Sun has previously been sued by the US Securities and Exchange Commission (SEC) for alleged fraud and market manipulation, causing considerable doubts about his credibility in the industry.
(Head-on confrontation: Coinbase says it delisted WBTC mainly because of Justin Sun)
The court dismissed the application, BiT Global's reasons were insufficient
The federal court pointed out that BiT Global took legal action only a few weeks after Coinbase's announcement of delisting, and could not see how "delisting" was so "urgently important" to BiT Global.
In addition, the court supplemented that BiT Global's arguments lacked substantial evidence, mostly being speculative and hypothetical. Coinbase's lawyer Sonal Mehta emphasized in the hearing that the decline in WBTC's circulation actually started after BiT Global announced Justin Sun's participation in the management, rather than being the main focus of Coinbase's delisting.
Coinbase's General Counsel Paul Grewal also posted on Twitter expressing his gratitude for the judgment result, and many netizens left comments supporting Coinbase.
Whether Coinbase is taking advantage of the situation, the two sides have different views
In the hearing, BiT Global's lawyer Cyclone Covey believed that Coinbase used Justin Sun as an excuse to delist WBTC, and accused Coinbase of not raising concerns in August, but only announcing the decision to delist in November. He also criticized Coinbase for being skeptical of the SEC and FBI investigations, but using their investigation of Sun as a reason to delist WBTC, with the two sides having different views.
Although the federal court currently supports Coinbase's delisting of WBTC, the court also allowed BiT Global to submit more evidence to continue the appeal. How the two parties handle these issues will inevitably affect the future development of the industry.
Risk Warning
Crypto asset investment is highly risky, and its price may fluctuate dramatically, and you may lose your entire principal. Please carefully evaluate the risks.
