Federal Bank's investment in MaiCoin falls through! The key reason the Financial Supervisory Commission rejected it is the "overseas parent company's" operational status.

Federal Bank planned to spend NT$850 million to invest in MaiCoin’s overseas holding company, but the Financial Supervisory Commission (FSC) rejected the plan on the grounds that there was no substantive operations. The investment will instead be carried out by the bank’s major shareholder. Federal Bank said that the existing virtual-currency business cooperation between the two parties will not be affected.

Federal Bank’s direct investment in MaiCoin rejected by the FSC

In August last year, Federal Bank’s board of directors approved a plan to acquire 5.356 million shares for a total amount of USD 27.817 million (about NT$850 million). This would give it approximately 9.67% equity in the overseas parent holding company of the Taiwan virtual-asset service provider MaiCoin, namely “Modernity Financial Holdings, Ltd”. The plan also originally intended to transfer all shares held by its subsidiary, Federal Venture Capital, to the bank.

However, yesterday (5/11), Federal Bank announced that after a clarification from the FSC, it was determined that MaiCoin’s overseas holding company is not in any financial-related business, and there is also no evidence of substantive operational activities. Therefore, this direct investment case will not be executed. Federal Bank stated that this change will not have any major impact on the company’s finances or operations.

Section 74 of the Banking Act becomes the key reason for the FSC’s rejection

Federal Bank’s direct investment in MaiCoin was rejected mainly due to the regulations under Section 74 of the Banking Act.

The provision states that regardless of whether commercial banks invest in financial-related businesses or non-financial-related businesses, they must obtain approval from the competent authority, and the entity being invested in must have substantive operational activities. If the investment target is a non-financial-related business, the bank’s shareholding ratio may not exceed 5% of the company’s issued shares under the law.

After internal discussions, the FSC determined that Modernity Financial Holdings, Ltd is an overseas holding company established in the British Cayman Islands. It is not engaged in any financial-related business and has no operational activities of its own, so it fully fails to meet the investment preconditions under Section 74 of the Banking Act.

Image source: National Law Database — Banking Act, Article 74

Federal Bank steadily moves into the crypto space, holding custody business and co-branded cards

After the FSC advanced the draft “Virtual Asset Service Act” and the licensing regime for virtual asset service providers (VASPs), Federal Bank has been one of the more proactive banks in developing the crypto space.

Not only did it officially launch virtual-asset custody services in September 2025, becoming the first approved financial institution to go live in Taiwan, but it has also recently rolled out its first credit card combining cryptocurrency rewards. Rewards from card spending can be directly redeemed for Bitcoin, Ethereum, Tether, and virtual currencies such as $USDC .

Federal Bank’s general manager, Xu Weiwen, also previously said at a press conference that he believes the bank’s virtual-asset custody business will be rolled out in four phases. In the initial stage, it will focus on assets on trading platforms; later, it will expand to professional legal entities and high-net-worth individuals; and ultimately, it will look toward the custody needs for crypto ETFs that investment trusts may issue in the future.

Related report:
A new chapter for Taiwan’s crypto community! EasyCard links up with virtual assets; Federal Bank: investment trusts may issue crypto ETFs in the future

Although Federal Bank’s further attempt to invest directly in MaiCoin fell through, according to reports from the Economic Daily and the Commercial Times, even if it is not able to take an equity stake directly, it is understood that the investment plan will be carried out through the personal relationship enterprises of Federal Bank’s major shareholder, and the existing cooperation model between the two parties is expected to remain unaffected. Federal Bank also emphasized that it fully respects the determinations made by the competent authority.