Crypto Exchanges Now Virtual Currency Platforms and Trading Businesses in Taiwan

Share IT

Key takeaways:

  • Cryptocurrency enterprises are classified as “virtual currency platforms and trading businesses” in Taiwan.
  • Bitcoin firms and blockchain enterprises have sprung up in Taiwan in recent years, fueled by the advent of Bitcoin. Taiwan was formerly home to the defunct Cobinhood cryptocurrency exchange.
  • MOEA determined that cryptocurrency enterprises will appear in the area of “finance, insurance, and real estate” as “virtual currency platforms and commercial businesses” in place under the category of “software design services” during a cabinet meeting on Monday.

There was no one set of legislation or regulations in Taiwan that exclusively governed cryptocurrency in the past. However, the Financial Supervisory Commission (FSC) classified Bitcoin and other virtual currencies as highly speculative virtual products purchased and sold for profit. The FSC has also regularly advised citizens that virtual currencies are highly speculative and volatile investments.

TAIPEI (Taiwan News) stated that following years of regulatory uncertainty in the cryptocurrency sector, the Taiwan Ministry of Economic Affairs (MOEA) has codified the categorization of economic operations surrounding bitcoin and formed a supervisory authority.

The Financial Services Commission (FSC) is the administrative agency implementing financial services legislation that applies to enterprises including banks, securities firms, futures firms, and insurers. However, it is still unclear if virtual currencies are subject to the FSC’s supervision.
The Ministry of Economic Affairs (MOEA) is in charge of creating policies and regulations for industry and commerce, foreign direct investment, energy, minerals, measuring standards, intellectual property, and state-owned businesses in the Republic of China (Taiwan). The Executive Yuan’s ministry is a cabinet-level government institution.

Crypto Exchanges Now Virtual Currency Platforms And Trading Businesses In Taiwan

The MOEA is claimed to have decided in a Cabinet meeting on Monday (Nov. 15) that cryptocurrency enterprises will be classified as “virtual currency platforms and trading businesses” under the area of “finance, insurance, and real estate,” rather than “software design services.”

On June 27, 2019, the FSC issued a judgment declaring that some tokens that fulfill the Howey test would be considered a securities token sale (STO). The Howey Test has the following criteria:

  • There is a monetary investment in a common venture with the prospect of profits, and the earnings are primarily derived from the issuer’s or a third party’s activities.
  • Under Taiwanese law, such tokens are considered securities and are subject to all applicable securities rules, notably the Securities Exchange Act of Taiwan.

As a result, the Financial Supervisory Commission (FSC) will be the primary authority in charge, working with tax and legal agencies to establish laws to oversee the rapidly developing yet volatile cryptocurrency sector.

Last month, the first Bitcoin futures exchange-traded fund (ETF) began trading in the United States, with a market value of more than $3 trillion (NT$83 trillion). In addition, Taiwan’s legislative body is pressuring the government to take aggressive measures to remove crypto loopholes and protect local investors and consumers.

Meanwhile, security token offers (STOs), a sort of public offering for digital tokens using blockchain or distributed ledger technology, will be classified as securities firms and regulated similarly to other securities firms.

Share IT
Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

Get Daily Updates

Crypto News, NFTs and Market Updates

Claim Your Free Trading Guide

Sign up for newsletter below and get your free crypto trading guide.

Can’t find what you’re looking for? Type below and hit enter!