Taiwan to Impose Stricter Regulations on Offshore Cryptocurrency Exchanges
Crypto News – Taiwan’s government is taking decisive steps to tighten its grip on the cryptocurrency industry. As part of its forthcoming regulatory framework, Taiwanese authorities have confirmed plans to restrict offshore cryptocurrency exchanges from conducting operations onshore without proper compliance registration. This development comes as the Financial Supervisory Commission (FSC) of Taiwan reveals ten guiding principles designed for virtual asset service providers (VASPs) to establish their own self-regulatory protocols.
Initially reported by Taiwan’s semi-official Central News Agency, an FSC official disclosed during a recent conversation with The Block that the regulatory body intends to officially unveil these guiding principles by the end of the current month.
The proposed principles encompass a range of crucial aspects, including bolstering transparency through enhanced information disclosure, mandating businesses to establish rigorous standards for the listing and delisting of virtual assets, and ensuring the clear segregation and secure custody of both company and customer assets, as emphasized by the FSC official.
One prominent restriction in these principles is the strict prohibition of illicit business solicitation by foreign cryptocurrency firms. The FSC intends to specify that foreign VASPs must adhere to company law and declare their compliance with anti-money laundering regulations to the FSC in order to operate within Taiwan or engage with domestic residents.
It is worth noting that Taiwan has already mandated VASPs to comply with anti-money laundering laws since the introduction of related regulations by the FSC in July 2021. Prior to this, the cryptocurrency industry in Taiwan had operated with relatively little oversight.
In recent news, The Block reported that Binance, one of the world’s largest cryptocurrency exchanges, is in the process of seeking registration in Taiwan to ensure compliance with anti-money laundering requirements. While Binance currently operates without direct regulation in Taiwan, the exchange has established a local entity known as “Binance International Limited Taiwan Branch (Seychelles),” as confirmed by the Department of Commerce’s records. This registration was granted by the Taiwanese government on May 12, 2023, with a registered capital of NT$30 million ($937,000).
Furthermore, in a forward-looking move, the Ministry of Economic Affairs announced last month its proposal to introduce a new business category within relevant regulations. This initiative aims to facilitate the establishment of industry associations by cryptocurrency-related companies, fostering the development of self-regulatory guidelines within the sector.