Taiwan’s FSC Takes Bold Steps Toward Comprehensive Crypto Regulation

Taiwan’s FSC Takes Bold Steps Toward Comprehensive Crypto Regulation

Crypto News – The Financial Supervisory Commission (FSC) of Taiwan, also referred to as the Republic of China, is poised to officially introduce its “Guiding Principles for the Management of Virtual Asset Platforms and Trading Businesses (VASP)” before the conclusion of this month, as reported by a local news agency on September 7th.

In a context where mainland China has imposed a comprehensive ban on cryptocurrency trading and mining, Taiwan is taking strides towards the establishment of a regulatory framework for cryptocurrencies. The FSC’s initiatives encompass a range of critical areas, including the enhancement of oversight for virtual asset issuance, the establishment of a comprehensive review mechanism for listing and delisting, and rigorous oversight concerning the segregation of platform assets from customer assets.

Furthermore, companies operating in the cryptocurrency space are expected to adhere to a set of stringent requirements. These encompass ensuring fairness and transparency in transactions, fortifying protocols for contract formulation, advertising solicitation, and complaint handling, establishing robust systems for continued operations, safeguarding information security, and managing both hot and cold wallet private keys. Internal controls and internal audit systems are also emphasized.

The FSC is placing significant importance on anti-money laundering (AML) and counter-financing of terrorism laws compliance. Overseas virtual asset platform operators are required to register with the FSC to engage in business activities within Taiwan, reinforcing the commitment to regulatory compliance.

In March 2023, the government of the Republic of China, Taiwan, made a significant decision to bolster the regulation of cryptocurrency assets and designated the Financial Supervisory Commission (FSC) as the competent authority for overseeing this domain. This regulatory framework draws inspiration from established regulations in countries such as European Union member states, Singapore, and Japan.

The cryptocurrency industry, including exchanges and related entities, has been advocating for crypto-friendly regulations in Taiwan. In March, prominent entities such as Binance Holdings, Matrixport Technologies, and Woo Network LLC jointly submitted a paper urging regulators to adopt regulations that provide clarity for companies operating within Taiwan.

Taiwan experienced a surge in cryptocurrency activity following China’s comprehensive crackdown on cryptocurrencies in 2021. This situation prompted Taiwan to adopt a more stringent regulatory approach to cryptocurrencies, addressing the lack of essential rules and regulations. The regulatory authorities are now striving to provide comprehensive guidelines, in contrast to the perceived lack of clarity from the U.S. Securities and Exchange Commission (SEC) in the cryptocurrency industry.