"Crypto Hu Shi" charges for teaching coin trading sparks controversy; regulatory authorities warn of compliance concerns

December 17th, Taiwan’s financial sector was stirred by a wave of controversy. In a joint warning announcement issued by the three major associations of securities and futures industries, “Yang Ji Co., Ltd. (Crypto Hu Shi)” was listed as an unapproved virtual currency service provider, sparking heated market discussion. This company, operating under the banner of a “legitimate supplementary education industry,” was called out by regulatory authorities for offering cryptocurrency investment courses, raising questions about its compliance.

However, the key issue lies in: whether a platform claiming to be a “supplementary education provider” that teaches investors to trade coins through class enrollment and charges tuition fees is crossing legal boundaries?

From “Supplementary Education Provider” to “Investment Advisor” – Role Identification is Critical

According to publicly available information, Crypto Hu Shi has been steadily profitable since 2020. Subsequently, the founder and a student known as “Abo” collaborated to establish what they called “the first crypto tutoring cram school.” This platform offers various courses including “Spot Class,” “Grid Class,” “Small Coin Group,” and even provides one-on-one tutoring sessions through Abo, directly giving cryptocurrency investment advice to students.

This business model presents a clear identity contradiction: it is registered under the “supplementary education” sector but simultaneously provides professional investment advice services. Generally, educational institutions teaching exam techniques or academic subjects differ fundamentally from providing direct financial investment advice.

Financial Supervisory Commission and Three Associations Issue Joint Statement – “Yang Ji Co., Ltd.” Named and Warned

According to a joint announcement supervised by the Financial Supervisory Commission (FSC), “Yang Ji Co., Ltd.” has not completed registration under the “Regulations on the Prevention of Money Laundering for Businesses or Personnel Providing Virtual Asset Services,” nor submitted a compliance declaration for anti-money laundering laws to the FSC. Therefore, it is prohibited from engaging in activities related to virtual currency platform solicitation.

The FSC further advised the public to refuse virtual currency trading services from this company and to avoid remitting funds to its designated accounts.

In response to this announcement, Crypto Hu Shi stated on social media on December 18th that industry associations are not government organizations, and that the announcement was based solely on complaints, claiming it has no legal effect. The company emphasized that it is a “legitimate tax-paying supplementary education provider” and not a virtual currency platform or coin dealer, asserting that it was maliciously reported.

Unlicensed Courses and Fees – Legal Precedents Already Set

Nevertheless, even if Crypto Hu Shi denies being a coin dealer, its legal risks remain. Past judicial rulings indicate that “charging tuition for private investment courses” could itself be illegal.

Taiwanese courts have ruled on similar cases: unlicensed financial courses offering stock investment advice for a fee were found to violate the “Securities Investment Trust and Consulting Act,” resulting in criminal penalties for the instructors. In another case, a self-proclaimed “Trading Doctor” financial expert who operated without approval from authorities and held “day trading classes” for students was sentenced to five months in prison in the first trial, with 4 million NT dollars in tuition income confiscated.

These precedents demonstrate that, even if claiming to be merely “educational,” providing financial investment advice for a fee to students can be regarded by regulators as illegal financial consulting behavior.

Securities Classification – The Gray Area of Legal Framework

Under Taiwan law, if certain cryptocurrencies are classified as “securities” under Article 6 of the Securities and Exchange Act, then any promotion or recommendation activities must comply with the Securities and Exchange Act. If someone, without approval from the competent authority, directly or indirectly receives compensation from clients to provide securities valuation analysis and recommendations, it constitutes “illegal securities investment advisory business.”

It is noteworthy that, according to the business registration data of Crypto Hu Shi’s company “Yang Ji Co., Ltd.,” its scope of business does not include “Securities Investment Consulting Business” (H304011), indicating it lacks the legal qualification for such activities. This means that even if Crypto Hu Shi claims to be merely an educational provider, once it involves providing securities or quasi-securities investment advice, it lacks the legal basis.

How Investors Should Respond – Be Alert to Risk Signals

From the overall development of this incident, Crypto Hu Shi’s legal status remains unclear. The joint warning from the FSC and the three associations marks them as high-risk targets. Investors should be vigilant for the following risk signals when choosing investment education services:

• Verify whether the provider holds a legitimate financial advisor license
• Be cautious of paid courses claiming to “secretly teach tips”
• Confirm whether the cryptocurrencies involved are classified as securities in Taiwan
• Request clear service contracts and written records of investment advice

For platforms like Crypto Hu Shi, investors should remain cautious until their legal identity is definitively clarified. The next steps by regulators could be pivotal in defining the legal boundaries of cryptocurrency investment education businesses.