Taiwan is gearing up to impose strict restrictions on unregistered overseas cryptocurrency exchanges operating within its borders as part of an upcoming guidance package aimed at virtual asset service providers (VASPs). The Financial Supervisory Commission (FSC) of Taiwan has taken a proactive stance to ensure greater transparency and security in the cryptocurrency sector, with a draft containing ten guiding principles for the management of virtual currencies in the country.
The draft guidelines, reported by the Central News Agency on September 7, outline a comprehensive approach to regulating VASPs within Taiwan. Among the key points, the FSC plans to enhance information disclosure requirements for crypto exchanges. Operators will be mandated to establish rigorous standards for reviewing the listing and delisting of cryptocurrencies, promoting a more transparent trading environment.
To safeguard customer assets and prevent potential misuse, the FSC’s draft guidelines stipulate the separation of customer and platform assets. This move aligns with international best practices and bolsters the security of users’ funds.
Another crucial aspect of the guidelines is the focus on anti-money laundering (AML) measures. VASPs in Taiwan will be required to implement robust AML procedures to counter illicit financial activities. This commitment to preventing money laundering underscores Taiwan’s dedication to international financial standards.
One of the most noteworthy principles set by the FSC is its determination to prevent foreign VASPs from illegally soliciting business within Taiwan. To achieve this, the FSC’s proposal is clear: overseas crypto platforms that lack company registration in Taiwan and fail to comply with the nation’s AML laws will be prohibited from conducting business in Taiwan or targeting its citizens.
The FSC is committed to staying abreast of global developments in the cryptocurrency sector. The agency has indicated its willingness to make necessary amendments to regulations as the industry evolves, ensuring that Taiwan remains competitive and secure in the world of cryptocurrencies.
FSC Chairperson Huang Tien-mu announced in March that the FSC would assume primary regulatory responsibility for cryptocurrencies in Taiwan. Among the critical policies and rules highlighted by Chairperson Huang was the separation of company assets from customer funds, a measure designed to safeguard user investments.
An official announcement detailing the finalized guidance for VASPs in Taiwan is expected by the end of September. This move demonstrates Taiwan’s commitment to fostering a secure and transparent cryptocurrency ecosystem, aligning its regulatory framework with international standards, and ensuring that the interests of its citizens are protected in the rapidly evolving world of digital assets.
