Taiwan Introduces Guidelines for Virtual Asset Service Providers to Protect Customers
Taiwan’s Financial Supervisory Commission (FSC) has issued guidelines for virtual asset service providers (VASPs) that prioritize customer protection. According to the FSC, domestic crypto platforms must ensure the separation and custody of both company and customer assets, establish review standards for virtual asset listing and delisting, and enhance information disclosure.
Registration Requirements for Offshore Exchanges
The new guidelines also state that offshore exchanges intending to operate in Taiwan must register with the FSC. The guidelines specifically mention that foreign virtual asset platform operators must comply with company laws and anti-money laundering regulations declared to the FSC in order to conduct business in Taiwan or target Taiwanese nationals. Binance, the world’s largest crypto exchange, is reportedly applying for registration in Taiwan to comply with anti-money laundering requirements.
Prohibited Operations for Crypto Platforms
The FSC has emphasized that crypto platforms are not allowed to engage in operations involving derivative financial products with virtual assets as underlying assets or conduct virtual asset businesses with securities-like characteristics.
Continued Emphasis on Anti-Money Laundering Compliance
Taiwan had previously implemented anti-money laundering rules for VASPs in July 2021. The new guidelines reinforce the importance of complying with these regulations.
Formation of Self-Regulatory Industry Association
Following the release of the FSC’s guidelines, crypto platforms in Taiwan are expected to establish an industry association and develop self-supervisory rules based on the guidelines. Currently, nine crypto exchanges have formed a working group in preparation for the association’s establishment. These exchanges include major players like MaiCoin, BitoGroup, and ACE.
Potential Benefits of the Guidelines
Wayne Huang, co-founder and Group CEO of XREX, a Taipei-based crypto exchange, believes that the FSC’s guidelines have the potential to give birth to a new industry in Taiwan. He states that these guidelines provide legitimacy, oversight, a clear growth path, and an accelerated means to gain public trust for the crypto industry.
Hot Take: Taiwan Sets Customer Protection as Priority with New Guidelines for Crypto Platforms
Taiwan’s Financial Supervisory Commission has introduced guidelines for virtual asset service providers (VASPs) that focus on protecting customers. These guidelines require domestic crypto platforms to safeguard company and customer assets, establish review standards for virtual asset listings, and enhance information disclosure. Offshore exchanges seeking to operate in Taiwan must register with the FSC and comply with anti-money laundering regulations. The FSC also prohibits crypto platforms from engaging in certain operations involving virtual assets. These guidelines build on previous anti-money laundering rules implemented in July 2021. Additionally, crypto platforms are expected to form an industry association and develop self-supervisory rules based on the FSC’s guidelines. This move could provide legitimacy and oversight to the industry while accelerating public trust in cryptocurrencies.
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