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In an era of increasingly frequent modern financial activities, many people may inadvertently violate the Banking Act because they do not understand the legal provisions. The Banking Act has a wide range of regulations. In addition to bankers, ordinary people may also face criminal liability if they are involved in illegal fund-raising, underground foreign exchange, etc. This article is analyzed by a Taipei banking lawyer to help you avoid the risk of accidentally violating the law!
What does banking law mainly regulate?
According to Article 29 of the Banking Law, "non-banks are not allowed to engage in the business of accepting deposits, managing trust funds, handling domestic and foreign exchange transactions, etc." In short, unless you are a legitimate bank or financial institution, the act of "taking money to do things" is likely to be illegal.
Many people mistakenly believe that as long as they do not commit fraud and make normal repayments, everything will be fine. But in fact, as long as your behavior meets the criteria of "accepting funds from the majority of people and promising to pay compensation", it may be deemed as "illegal fund-raising", which is punishable by a maximum of 3 to 10 years in prison, or even a fine of up to 100 million yuan (Article 125 of the Banking Law).
The most common illegal behaviors that people are misled about
- Private mutual aid associations and investment dividends may cross the line
Many private bidding clubs and investment groups will attract friends and relatives to join with "high returns". For example:
"Fixed monthly dividend of 5%, guaranteed profit"
"Everyone pools money together to invest and share profits"
If such behavior is not approved by the Financial Supervisory Commission, it may be considered by the prosecutors as "illegal operation of banking business." In the past, there was a case where a company raised funds from the public in the name of "stock trading" and the person in charge was sentenced.
- Underground exchange (helping others to exchange currency may also be illegal)
It is common to see currency exchange advertisements on the Internet or social media that say: "The exchange rate is better than that of banks, helping you save on handling fees." However, if you "regularly exchange foreign currencies for others" and earn the price difference, you may be involved in illegal currency exchange business.
There was a case where a foreigner in Taiwan was prosecuted under the Banking Act for providing "Taiwan dollar exchange for US dollars" service in a LINE group for a long time.
- When trading virtual currencies, beware of the "illegal money-making" trap
In recent years, many virtual currency and blockchain investment projects have advertised "high return rates and guaranteed profits", but if they raise funds from the general public without permission, they may violate the law. For example:
Issue its own virtual currency and promise future appreciation
In the name of "mining machine investment", members are required to pay membership fees
The Financial Supervisory Commission has warned many times that unapproved ICOs (initial coin offerings) may involve the Banking Act or the Securities and Exchange Act, and several cases have been investigated by prosecutors.
How to avoid accidentally violating banking laws?
If you or your relatives and friends are involved in private investment, currency exchange, virtual currency trading and other activities, it is recommended to pay attention to the following points:
Don’t promise “fixed profits”: Even when investing between friends and family, you should avoid using terms such as “guaranteed returns”.
Avoid "public fundraising": Even a small-scale LINE group may be considered to be "raising funds from unspecified persons."
Find legal channels to exchange foreign currency: Foreign currency exchange should be done through banks or legal remittance institutions. Private currency exchange may violate the law if it is "commercial".
What should I do if I have been investigated?
If you receive a subpoena or an investigation letter from the Banking Bureau due to the above-mentioned behavior, it is recommended that you:
✅ Keep silent and don’t sign documents casually
✅ Contact a professional banking lawyer as soon as possible to assess whether there is room for innocence or sentence reduction
✅ Organize relevant financial flow evidence, such as contracts, conversation records, and remittance certificates
Many people involved in the case were initially just helping their relatives or friends invest or exchange currency, but because they were not familiar with the law, they were prosecuted for felonies. If they can seek the help of a lawyer early, they may be able to obtain a deferred prosecution or a lighter sentence.
Conclusion: Invest legally and protect your own rights and interests
The penalties under the Banking Law are quite strict. Even if the behavior is done with good intentions, you may face criminal liability due to insufficient legal knowledge. If you have any business model involving fund transactions, be sure to confirm whether it complies with the regulations, or consult a professional banking lawyer to avoid accidentally breaking the law!
⚖️ Do you have questions related to banking law? Taipei banking lawyers provide professional consultation, contact us now!
related news:https://fdlaw.com.tw/blog/fraud-3/
related news:https://fdlaw.com.tw/blog/banking-act/
Banking Law # Banking Lawyer # Taipei Banking Lawyer # Illegal Fund Raising # Underground Foreign Exchange # Legal Risks of Virtual Currency
Why should you seek criminal counsel as early as possible when you are under investigation for violating banking laws?
Banking law cases commonly involve illegal fundraising, underground money exchange, investment schemes, virtual currency trading, cross-border fund transfers, or multi-level marketing schemes. These cases typically involve large sums of money, numerous participants, and a large amount of data. Once you receive notification from the police, investigation bureau, or district prosecutor's office, or if your accounts and electronic data have been searched and seized, you should immediately compile a record of fund flows, contracts, investment descriptions, group chats, remittance records, and internal company decision-making documents.
When handling major commercial criminal cases, Fidelity Law Firm examines the flow of funds, contractual structure, actual operating model, investor perception, and the role of responsible persons to help determine whether there are risks of illegal operation of deposit-taking business, illegal foreign exchange, fraud, money laundering, or other financial crimes. They also plan for investigative accompaniment, detention defenses, and subsequent procedures.Criminal defense strategies.
Related services
If you or your company's management have received a summons, been summoned for questioning, or been searched, please refer to the following:Criminal lawyers and defense in major criminal cases,Tax and cash flow disputes,Business legal services.
Frequently Asked Questions
What should you do first if you receive a summons for violating banking laws?
You should first confirm the notifying authority, the cause of action, and whether you are a defendant or a witness. You should immediately preserve investment documents, transaction records, conversation records, company information, and account information to avoid making arbitrary statements before clarifying the risks.
What are the differences between illegal fundraising and general investment disputes?
Most investment disputes involve lower-than-expected profits or contract performance disputes; violations of banking laws will focus on whether funds were received from unspecified individuals, whether there were agreements to pay principal or high returns, and whether the actual operation complies with the prohibitions of banking laws.
Do lawyers need to accompany suspects during interrogations in banking law cases?
It is recommended. Banking law cases often involve complex financial flows, multiple testimonies, and company operational data. A lawyer can help clarify the scope of the issues, avoid misunderstandings of transaction patterns, and plan the subsequent defense strategy in advance.
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Frequently Asked Questions
What are some common forms of violations of banking laws?
Common examples include accepting deposits without permission, raising funds under the guise of investment, guaranteeing fixed returns, raising funds from the public, or soliciting investment through similar financial products.
Will being summoned for questioning in a banking law case necessarily result in detention?
Not necessarily, but if the amount involved is huge, there are many accomplices, the evidence is not yet clear, or the prosecution believes there is a risk of collusion, destruction of evidence, or escape, they may apply for detention. Therefore, the strategy in the early stages of the investigation is very important.
What can a lawyer do to assist a company executive who is accused of violating banking laws?
Lawyers can assist in clarifying the nature of funds, business model, external statements, investor relationships, subjective intent, and cash flow data, and handle interrogation, detention hearings, seizures, and subsequent defense.