Republic Of China Moves Ahead With Crypto Regulatory Regime Plans
The Financial Supervisory Commission of Taiwan, the Republic of China, will officially announce the “Guiding Principles for the Management of Virtual Asset Platforms and Trading Businesses (VASP)” before the end of this month, a local news agency reported on September 7.
Amid the complete ban on crypto trading and mining in mainland China, Taiwan to release guiding principles for crypto regulation. The FSC will work on key aspects such as strengthening the management of virtual asset issuance, establishing a review mechanism for listing and delisting, and oversight on separation of platform assets and customer assets.
In addition, companies must ensure transaction fairness and transparency; strengthen contract formulation, advertising solicitation, and complaint handling; establish a system for continued operations, information security, and hot and cold wallet private keys; and internal control and internal audit systems.
The FSC needs exchanges and firms to declare their compliance with the anti-money laundering (AML) and counter-financing of terrorism laws. Moreover, overseas virtual asset platform operators will not be able to solicit business in Taiwan if they don’t register with the FSC.
In March 2023, the government of the Republic of China (Taiwan) decided to enhance the regulation of crypto assets and designate the Financial Supervisory Commission (FSC) as the competent authority. The crypto regulatory regime is based on regulations in countries such as European Union nations, Singapore, and Japan.
Crypto Industry Calls Crypto Regulations in Taiwan
Crypto companies including exchanges are calling for crypto-friendly regulations in the country. In March, Binance Holdings, Matrixport Technologies, and Woo Network LLC sent a joint paper urging regulators for more friendly regulation that provides clarity for companies operating in Taiwan.
The country witnessed increased crypto activity after China’s crypto crackdown in 2021. It forced the country to take a strict approach toward crypto amid a lack of necessary rules and regulations. Now, the regulators are providing guidelines for clarity, unlike the US SEC’s failure to provide clarity to the crypto industry.