A former technology chief at CoolWallet, the cold wallet brand operated by CoolBitX, has been sentenced by the New Taipei District Court to five months in prison in a money laundering case tied to a fraud ring. A co-defendant surnamed Huang received the same sentence. The court also fined both men NT$100,000 and ordered the confiscation and recovery of 88,053.7 USDT. Prosecutors in New Taipei said they consider the punishment too light and will appeal, meaning the ruling is not final.
Case began with a police report in Chiayi
The case started in Chiayi. According to the report, the Criminal Investigation Corps of the Chiayi County Police Bureau received a complaint in July 2024 and traced the flow of funds, concluding that the fraud ring was using cryptocurrency to launder money. Because the victims were located across Taiwan, the case was transferred to the New Taipei District Prosecutors Office, which directed the investigation, filed charges, and brought the case to court.
Huang was identified in the report as Chuang’s EMBA classmate. Prosecutors said he worked at a virtual asset company in China and was the person who pulled Chuang into the laundering chain.
Prosecutors said the arrangement was disguised as “virtual currency lending”
Prosecutors described the operation as a scheme packaged as “virtual currency lending.” Chuang allegedly provided 198,600 USDT, worth about NT$6.4 million at the time. The funds were sent to a cold wallet in China and then transferred onward to a non-custodial account. The report said the two men set up three separate breakpoints in the flow of funds.
The court identified 88,053.7 USDT as the laundered property subject to confiscation and recovery. The report drew a clear distinction between several figures in the case: 88,053.7 USDT was the amount the court ordered confiscated, 198,600 USDT was the amount Chuang was said to have handled and sent out, and more than NT$3.25 million was the combined loss suffered by seven victims. Those figures do not represent the same thing.
Seven victims across Taiwan lost more than NT$3.25 million
Prosecutors said seven victims across Taiwan were defrauded. Individual losses ranged from NT$120,000 to NT$950,000, for a total exceeding NT$3.25 million.
After the case surfaced, Chuang was also accused of deleting relevant records in an attempt to destroy evidence. When he was found, he claimed he did not have a mobile phone. Police later searched Huang under a warrant and found chat records on Huang’s phone showing discussions about the process involving Huang, Chuang, and the fraud group.
Prosecutors to appeal the sentence
The first-instance judgment is not final. The New Taipei District Prosecutors Office said it will appeal because it considers the sentence too light. At this stage, each defendant has been sentenced to five months in prison, fined NT$100,000, and subjected to confiscation and recovery of 88,053.7 USDT.
Report pointed to a legal timing window under Taiwan’s amended law
The report also highlighted the timing of the case under Taiwan’s Money Laundering Control Act. The amendments were promulgated on July 31, 2024, and took effect on Aug. 2, 2024. The report described the revision as the largest overhaul in the law’s history.
Before the amendment, Article 14 provided that general money laundering offenses were punishable by up to seven years in prison and a fine of up to NT$5 million, with no minimum prison term. After the amendment, Article 19 introduced a tiered structure. Where laundered property reaches NT$100 million or more, the penalty is three to 10 years in prison. If the amount is below NT$100 million, the penalty is six months to five years in prison, plus a fine of up to NT$50 million.
Police received the complaint in this case in July 2024, placing the conduct before the new law took effect. The report noted that the five-month sentence in this case is one month below the post-amendment minimum for cases involving less than NT$100 million. In other words, if the same conduct had occurred after Aug. 2, 2024, the minimum sentence upon conviction would have been six months.
The report also noted that media coverage did not provide the judgment number or specify which version of the law the court applied. Its comparison of the old and new provisions was presented as an objective contrast between the texts, not as a conclusion about the court’s legal basis.
Custody of seized crypto assets also drew attention
The report said that as recently as two years ago, seized cryptocurrencies were often stored using physical cold wallets, with the password, seed phrase, and device itself held separately by three different people. Taiwan later moved to centralized custody through the “Seized Virtual Asset Supervision System Platform,” which was built by the Taiwan High Prosecutors Office under commission from the Ministry of Justice and launched on April 15, 2024.
The report added that multiple media outlets have said several judicial and law enforcement agencies in Taiwan have used devices from the same brand as tools for evidence seizure.