Taiwan Introduces New Regulations for Cryptocurrency Market

Taiwan’s Financial Supervisory Commission (FSC) is introducing new regulations to enhance investor protections for cryptocurrencies.

The FSC has formulated the key points for regulating the cryptocurrency market in Taiwan, releasing on Sept. 26 a set of industry guidelines for virtual asset service providers (VASP) functioning in the country.

In the guidelines, the authority mentioned common industry-wide rules, such as segregating exchange treasury assets from customer assets and examining listing and delisting mechanisms for virtual assets.

The FSC also mandated that foreign VASPs refrain from offering their services in Taiwan without the required authorizations. The FSC 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.”

The authority also stated that VASPs are invited to promote self-regulation in the cryptocurrency industry, with the expectation that relevant VASP associations will develop self-regulatory norms based on the contents of the guiding principles.

The guidelines were issued at the same time that major crypto exchanges in Taiwan announced the formation of a self-regulatory association.

Local exchanges such as Maicoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito founded the Taiwan VASP Association on September 26, intending to promote the industry and assist regulators.

In addition to local exchanges, prominent global crypto trading firms such as Binance have been serving Taiwanese customers.

At the time of writing, Kraken Exchange states that it provides “full services to Taiwanese clients,” while ByBit Exchange’s website indicates that Visa and Mastercard payments are accepted in Taiwan and other countries.

Binance reportedly submitted an application for registration in Taiwan under the Money Laundering Control Act and the Financial Supervisory Commission in August.

The news comes immediately after local publications reported on September 7 that the FSC drafted 10 guiding principles for the management of virtual currencies in the country, intending to restrict unregistered crypto exchanges.

The framework follows the FSC’s 2023 appointment as the primary cryptocurrency regulator in the island nation.