When FTX collapsed, about 950 users Taiwan had a total of $150 million worth of digital assets stored or held on cryptocurrency exchanges, according to a law firm. FTX users in Taiwan were reportedly investing in lucrative digital assets using cheap funds borrowed from local banks.
Popularity of FTX by Taiwanese users
According to the Taiwanese law firm Enlighten Law Group, about 950 people in the country had $150 million worth of digital assets stored in cryptocurrency FTX exchanges if they collapsed. The law firm also revealed that four unnamed individuals each suffered losses in excess of $5 million.
As noted in the report by Wublockchain, the number of his FTX victims in Taiwan is higher than that of victims reported in China. 30 times more than The report also said he was the only Chinese user to lose more than $5 million.
The law firm explains what seems to lure Taiwanese users to loosely regulated cryptocurrency trading platforms like FTX, citing collapsed cryptocurrencies. He noted that the exchange makes effective use of local partners and ambassadors. The Taiwanese user’s easy access to funds and the fact that his FTX is owned by a non-Chinese citizen were also identified as key factors by the law firm.
Taking advantage of low interest rates in Taiwan
However, according to Enlighten Law Group, cryptocurrency exchange offers The 8% interest rate on interest-bearing products may be one of the main reasons Taiwanese users flocked to Bahamas-registered crypto exchanges.
“In Taiwan, interest rates on bank deposits are almost zero, and interest rates on mortgages and credit loans are about 3%,” the report explains. is quoting. According to the law firm, some users took advantage of this arbitrage gap by “borrowing from the bank and re-depositing into FTX.”
Intervention by Taiwanese authorities is said to be unlikely, so law firms urged Taiwanese users to seek remedies in the United States. in progress.
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