Key Takeaways
- Taiwan’s Financial Supervisory Commission (FSC) releases new guidelines for Virtual Asset Service Providers (VASPs).
- Foreign VASPs are prohibited from operating in Taiwan without proper registration.
- The guidelines were released on September 26, 2023, and aim to improve investor protection.
Regulatory Framework
Taiwan’s Financial Supervisory Commission (FSC) has taken steps to regulate the cryptocurrency market by releasing guidelines for Virtual Asset Service Providers (VASPs) on September 26, 2023. The guidelines cover a range of issues, including the separation of exchange treasury assets from customer assets, mechanisms for listing and delisting virtual assets, and internal control systems.
Foreign VASPs Face Restrictions
The FSC explicitly stated that foreign VASPs are not allowed to provide services in Taiwan unless they have been registered in accordance with Taiwanese law. This move aims to ensure that all VASPs operating in the country adhere to local regulations and compliance standards.
Self-Regulation Encouraged
The FSC also encourages self-regulation within the cryptocurrency industry. VASP associations are expected to formulate self-regulatory norms based on the contents of the guiding principles. This comes as local exchanges like Maicoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito have formed the Taiwan Virtual Asset Platform and Transaction Business Association.
Global Exchanges in Taiwan
Major global crypto trading firms like Binance have also been serving customers in Taiwan. Binance reportedly applied for registration in Taiwan under the Money Laundering Control Act. Other exchanges like Kraken and Bybit have been offering services to clients living in Taiwan.
Investor Protection
The FSC has emphasized the need for investor protection, especially in light of recent incidents involving foreign crypto exchanges. The guidelines are part of a broader effort to mitigate risks associated with the highly speculative nature of virtual assets.
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