In an effort to enhance investor protection in the cryptocurrency sector, Taiwan’s Financial Supervisory Commission (FSC) has introduced new regulations. The FSC recently unveiled a set of industry guidelines for virtual asset service providers (VASPs) operating within the country.
One notable aspect of the guidelines is the FSC’s prohibition on unregistered foreign VASPs offering their services in Taiwan. The regulator explicitly stated, “Overseas virtual asset platform operators are not allowed to provide business within the territory of the country […] unless they have been registered in accordance with the law.” This move seeks to ensure that foreign cryptocurrency exchanges adhere to local regulations.
The FSC has also encouraged VASPs to participate in self-regulation within the cryptocurrency industry. The expectation is that relevant VASP associations will establish self-regulatory norms based on the principles outlined in the guidelines. This collaborative approach aims to foster responsible practices within the industry.
Coinciding with the release of these guidelines, several local cryptocurrency exchanges, including Maicoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito, have come together to establish the Taiwan VASP Association. This association is dedicated to promoting the cryptocurrency industry and collaborating with regulators to ensure compliance.
Global Crypto Exchanges in Taiwan
In addition to local exchanges, major global cryptocurrency trading firms like Binance have been serving customers in Taiwan. Binance, for instance, applied for registration in Taiwan under the Money Laundering Control Act and the FSC in August. Other platforms like Kraken and ByBit have also been active in Taiwan’s market.
Growing Regulatory Framework
These developments follow the FSC’s creation of a draft containing ten guiding principles for the management of virtual currencies in Taiwan, with the intention of restricting unregistered crypto exchanges. The FSC assumed the role of the primary regulator for cryptocurrencies in Taiwan in 2023.
Taiwan’s cryptocurrency market is witnessing an evolution in its regulatory landscape, with a focus on ensuring transparency, security, and adherence to legal standards.