A local law firm in Taiwan has claimed that crypto funds equivalent to $150 Million belonging to FTX’s customers in Taiwan are stuck in the collapsed FTX.
The firm also suggested FTX’s Taiwan-based customers had invested funds in interest-based digital currencies trading which funds they had actually borrowed from local financial institutions.
Taiwanese Funs Stuck Up In Collapsed FTX
Enlighten Law Group, which is a popular law firm in Taiwan, has claimed that approximately 950 Taiwanese investors had invested their funds in FTX.
The Taiwanese law firm further pointed out that the funds, which have been stuck up with FTX, worth more than $150 Million.
According to the firm, at least five of the Taiwanese individuals, who were customers of FTX, had inflicted losses to the tune of $5 Million each.
FTX’s Huge Customer Base in Taiwan
A report published by Wublockchain revealed recently that as compared to China, FTX had vast customer-based in Taiwan.
The report further suggested that Taiwanese customers of FTX were literally 30 times more than those of FTX’s customers in China.
According to the report, only one Chinese FTX user has come forward claiming that he had incurred a loss of $5 Million.
Why Taiwanese Were More Interested In FTX Than Chinese?
According to the Taiwanese law firms, there were reasons which Taiwanese investors were more interested in FTX, although FTX was less regulated.
Firstly FTX provided more effective use of its services in Taiwan, particularly with regard to local partners and ambassadors.
Another factor that was considered a lot by FTX’s Taiwan-based customers was that FTX was neither owned nor controlled by any individual from China. This provided them with ease of comfort to do business with a foreign firm.
Cheap Interest-Based Country
Enlighten Law Group further described that Taiwan is very popular in the world because of its low-interest rate on crypto which is 8% only. Hence, attraction for crypto firms like FTX was obvious considering the low-interest rates.
FTX was therefore offering customers in Taiwan crypto products with an interest rate of 8%.
Furthermore, there were no deductions made when these customers funded their accounts with FTX. As regards mortgages and other borrowings/loans, the customers were charged only a 3% markup.
The law firm revealed that this was one of the reasons why many of FTX’s Taiwanese customers inflicted losses. It suggested that while considering low-interest rates, many of the investors borrowed loans from local financial institutions.
If Taiwanese customers were to raise and pursue their claims of funds recovery against FTX, they are restricted by jurisdictional obstacles. According to Enlighten Law Group, victims of FTX in Taiwan can file proceedings in the USA.
Instead of filing fresh proceedings, they could join proceedings that are already pursuing against FTX in the USA, opined Enlighten Law Group.