Taiwan’s Financial Supervisory Commission rejected the Federal Bank’s investment in the offshore holding company of MaiCoin, deeming it to have no substantial operations

According to a May 11 announcement by the Federal Bank, Taiwan’s Financial Supervisory Commission (FSC), citing that MaiCoin, an offshore holding company, lacks substantive operating activities, ruled that the Federal Bank’s planned direct investment of approximately NT$850 million into MaiCoin’s offshore holding parent company, Modernity Financial Holdings, Ltd, does not comply with Article 74 of the Banking Act.

Article 74 of the Banking Act: The legal basis rejected by the FSC

Per the Federal Bank’s announcement and Article 74 of the Banking Act, when a commercial bank invests in financial-related businesses or non-financial-related businesses, it must obtain approval from the competent authority; additionally, the investee must have substantive operating activities. If the target is a non-financial-related business, the bank’s equity stake may not exceed 5% of the company’s issued shares by law.

After internal deliberation, the FSC determined that Modernity Financial Holdings, Ltd is an offshore holding company incorporated in the British Cayman Islands and does not qualify as a financial-related business, and that it itself has no operating activities. Therefore, it completely fails to meet the investment preconditions under Article 74 of the Banking Act. According to the announcement, the Federal Bank originally planned to obtain 5.356 million shares, representing approximately 9.67% equity, and to transfer all shares held by its subsidiary Federal Venture Capital to the bank; the board resolution was passed in August 2025.

Current status of the Federal Bank’s crypto business layout

Based on the announcement and related reports, the Federal Bank officially began offering virtual asset custody services in September 2025, becoming the first financial institution in Taiwan permitted to roll out such services. Recently, it also launched its first credit card combining crypto-currency rewards, allowing cardholders’ spending to be directly converted into virtual currencies such as Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and USDC.

Federal Bank’s general manager Xu Weiwun said the virtual asset custody services plan will be advanced in four phases: initially focusing on assets of trading platforms, then expanding to professional legal entities and high-net-worth natural persons. The ultimate goal includes custodial needs for crypto-currency ETFs that may be issued by future investment trust companies.

Frequently asked questions

What legal basis did the FSC use to reject the Federal Bank’s investment in the MaiCoin offshore holding company?

According to the Federal Bank’s official announcement dated May 11, 2026, the FSC, under Article 74 of the Banking Act, determined that Modernity Financial Holdings, Ltd is an offshore holding company incorporated in the British Cayman Islands, not a financial-related business, and lacks substantive operating activities, and therefore does not meet the statutory investment preconditions.

What amount and equity stake did the Federal Bank originally plan to invest in MaiCoin?

Based on the Federal Bank’s board resolution in August 2025, the original plan was to acquire 5.356 million shares of Modernity Financial Holdings, Ltd for approximately $27.817 million (about NT$850 million), representing an equity stake of approximately 9.67%.

After the investment was rejected, did the business cooperation between the Federal Bank and MaiCoin get affected?

According to the Federal Bank’s official announcement, this direct investment case will instead be carried out separately by another major shareholder. The Federal Bank also stated clearly that the existing virtual-currency business cooperation between the two parties is not affected, and this change has no material impact on the company’s finances and operations.