- By enacting new regulations, Taiwan’s Financial Supervisory Commission (FSC) is working to strengthen investor protections for cryptocurrency.
- The FSC also mandated that overseas VASPs refrain from operating in Taiwan without the requisite regulatory permits.
By enacting new regulations, Taiwan’s Financial Supervisory Commission (FSC) is working to strengthen investor protections for cryptocurrency.
The FSC released a set of industry recommendations for virtual asset service providers (VASP) operating in Taiwan on September 26. These guidelines outline the main aspects of regulating the cryptocurrency sector in that nation.
The regulator included several generally accepted norms for the sector in the guidelines, such as segregating exchange treasury assets from client assets and examining the processes for listing and delisting virtual assets.
The FSC also mandated that overseas VASPs refrain from operating in Taiwan without the requisite regulatory permits. FSC declared:
“Overseas virtual asset platform operators are not allowed to solicit business within the territory of Taiwan or from Taiwan citizens, unless they have been registered in accordance with the Company Law, submitted to the Financial Supervisory Commission and completed a declaration of compliance with money laundering prevention laws,”
As relevant VASP associations are anticipated to develop self-regulatory standards based on the contents of the guiding principles, the authorities also stated that VASPs are invited to support self-regulation in the cryptocurrency industry.
Major cryptocurrency exchanges in Taiwan announced the formation of a cooperative self-regulatory body while the guidelines were released.
On September 26, a group of regional exchanges, including Maicoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito, formally established the Taiwan VASP Association to advance the sector and assist regulators.
Major international cryptocurrency trading companies like Binance have been offering Taiwanese customers in addition to local exchanges. While ByBit exchange enables Visa and Mastercard payments in nations like Taiwan, Kraken exchange offers “full services to clients living in Taiwan,” according to its website.
According to reports, Binance applied in August to be registered in Taiwan under the FSC and the Money Laundering Control Act.
The information was released shortly after local media outlets reported on September 7 that the FSC had drafted a set of 10 guiding principles for the country’s administration of virtual currencies and intended to limit unregistered crypto exchanges.
The framework comes shortly after the FSC assumed primary responsibility for cryptocurrency regulation in the island nation in 2023.