On the 11th, the Taiwanese community reported a complete freeze on withdrawals from compliant exchanges, sparking advice within the community to avoid using Taiwanese exchanges... (Background: Financial Supervisory Commission's new regulation: Mandatory disclosure of 'recipient's name' for transfers to reduce transaction errors and fraud risks) (Additional context: The Taiwanese Financial Supervisory Commission approved 'Bitcoin custody', with KGI, Citibank, and Federal Bank being the first to trial) The Taiwanese cryptocurrency community suddenly heated up discussions on 'withdrawal issues' today (11), with numerous posts circulating in community and Line groups claiming that several local exchanges had suspended withdrawal functions, causing panic among users. To date, no formal clarification has been issued by the platforms, but the upgrade in bank risk control and increased compliance costs are squeezing the public's space for using cryptocurrencies, pushing market sentiment into a high-pressure state, even promoting a refusal to use Taiwanese KYC exchanges, presenting a vicious cycle. Bank risk control compressing TWD channels According to reports from readers in the community over the past three months, banks have classified crypto-related remittances and withdrawals as high-risk activities. Several readers have recently experienced frequent return of incoming remittances, and some accounts have been designated as warning accounts. The Financial Supervisory Commission has already prohibited credit card purchases of cryptocurrencies, and underground OTC transactions may also violate the law, leading to a shrinking of TWD inflow and outflow channels. Users wishing to withdraw often encounter 'review delays'. One user stated that they had cooperated with exchanges like MAX for many years but noted that this time is the most problematic. Some users have switched to using foreign currency wire transfers to Kraken or Coinbase, then using stablecoins or tax-exempt income in USD from overseas back to Taiwan, but exchange rate differences, fees, and long wire transfer times remain hurdles, undermining the advantages of cryptocurrencies. Rumors, gray areas, and the truth? Despite several sources revealing to the community that there have been delays in withdrawals at compliant exchanges in Taiwan recently (11), there is currently no evidence showing that all mainstream exchanges have completely frozen withdrawals. Readers have indicated that customer service mostly responds with reasons related to bank reviews or blockchain congestion. Whether this is due to the recent tightening of VASP exchanges to eight and the Financial Supervisory Commission further strengthening control over cash flows to filter the list remains unknown. However, the lack of transparency in information and regulatory vacuum allows rumors to thrive. As long as official information is insufficient, users naturally worry about the worst-case scenario and may turn to illegal or gray area withdrawal channels, leading to a negative cycle. Experts urge users and regulatory agencies to be cautious. Experts remind that amidst concerns about liquidity, investors and users must be wary of unscrupulous individuals who may take advantage of rumors about withdrawal issues in compliant exchanges to spread illegal inflow and outflow channels, such as unregistered OTC traders, which may involve legal issues to avoid violations of anti-money laundering regulations. In principle, users in Taiwan should prioritize exchanges that comply with the Financial Supervisory Commission's anti-money laundering statements and regularly disclose reserve proofs, such as MaiCoin, MAX, or BitoPro, and continue to pay attention to announcements. However, in reality, it is not the first time that compliant exchanges in Taiwan have faced withdrawal restrictions. To prevent the public from fleeing into illegal gray areas, the Financial Supervisory Commission and relevant authorities should timely assess public sentiment and understand the actual use of virtual currencies among the public in Taiwan to avoid a situation where 'everyone in Taiwan is violating the law, and OTC trading is rampant'—a situation that is difficult to regulate and does not reflect actual public sentiment. To end the 'withdrawal panic', the key lies in regulation and information transparency, increasing communication between exchanges and the public. If the Financial Supervisory Commission can quickly understand the actual situation and provide clear guidelines for bank cooperation, while exchanges simultaneously strengthen cybersecurity and reserve disclosures, user and market trust may have a chance to stabilize. Otherwise, once the public begins promoting the use of gray platforms, regulation may become 'a lonely endeavor'. Related reports: Cathay United Bank can now store Bitcoin! First wave of trials approved, targeting high-net-worth clients. Are stablecoins just 'digital easy cards'? A cognitive battle that could stifle Taiwan's crypto future. Single digits! Taiwan's virtual currency service providers 'now only 8 remain', competition among crypto oligarchs begins. 'Taiwan community reports a financial disaster, multiple exchanges silent on withdrawals, SNS calls to “reject Taiwanese exchanges”'. This article was first published on BlockTempo (the most influential blockchain news media).