Federal Bank's investment in MaiCoin hits a dead end! The Financial Supervisory Commission's reasons for rejection revealed

Federal Bank’s Direct Investment in MaiCoin Rejected by Financial Supervisory Commission
In August last year, Federal Bank’s board of directors decided to acquire 27.82M shares, totaling USD 5.36M (about NT$850 million), to invest in Taiwan virtual asset service provider MaiCoin’s overseas parent company, “Modernity Financial Holdings, Ltd.,” approximately 9.67% of the equity, and also planned to transfer all shares held by its subsidiary Federal Venture Capital to the bank.
However, on May 11, Federal Bank announced that, after interpretation from the Financial Supervisory Commission, it was determined that MaiCoin’s overseas parent company is not engaged in financial-related businesses and has no substantial operational facts, so this direct investment will not be executed. Federal Bank explained that this change would not have a significant impact on the company’s finances and operations.

Key Role of Article 74 of the Banking Act in the Rejection
Federal Bank’s direct investment in MaiCoin was rejected mainly due to the regulations in Article 74 of the Banking Act.
This law stipulates that commercial banks, whether investing in financial or non-financial related businesses, must obtain approval from the competent authority, and the invested entity must have actual operational facts. If the investment target is a non-financial related business, the bank’s shareholding ratio must not exceed 5% of the company’s issued shares.
The Financial Supervisory Commission, after internal discussion, determined that Modernity Financial Holdings, Ltd. is an offshore holding company established in the Cayman Islands, not engaged in financial-related businesses, and has no operational facts itself, thus completely failing to meet the investment prerequisites of Article 74 of the Banking Act.

Source: National Legal Database, Banking Act Article 74 Regulations

Federal Bank Steadily Advances into the Cryptocurrency Space, Holding Custody and Co-branded Cards
Following the Financial Supervisory Commission’s promotion of the “Virtual Asset Service Act” draft and the virtual asset service provider (VASP) licensing system, Federal Bank is one of the more proactive banks in the crypto space.
Not only has it officially launched virtual asset custody services in September 2025, becoming the first financial institution in Taiwan approved to operate, but it has also recently introduced its first credit card that offers cryptocurrency rewards, where cardholders can directly exchange rewards for Bitcoin, Ethereum, Tether, and $USDC virtual currencies.
Federal Bank General Manager Xu Weiwen also stated at a recent press conference that he believes the bank’s virtual asset custody business will be promoted in four phases. Initially focusing on trading platform assets, then expanding to professional legal entities and high-net-worth individuals, and ultimately considering future needs for crypto ETF custody issued by investment trusts.
Although Federal Bank’s plan to directly invest in MaiCoin has fallen through, according to reports from the “Economic Daily” and “Commercial Times,” even if direct equity participation is not possible, it is understood that the investment plan will be carried out through related personal companies of the bank’s major shareholder, and it is expected that the existing cooperation mode will remain unaffected. Federal Bank also emphasized that it fully respects the regulatory authority’s determinations.