In a significant move to safeguard cryptocurrency investors, Taiwan’s Financial Supervisory Commission (FSC) has unveiled a set of comprehensive guidelines for virtual asset service providers (VASPs) operating within the nation. The new rules, designed to enhance investor protection and market integrity, come into effect immediately.
Crucial Regulatory Points
The FSC’s guidelines encompass critical regulatory points aimed at ensuring the security and transparency of the cryptocurrency market. Among these are measures such as segregating exchange treasury assets from customer assets, and establishing rigorous mechanisms for listing and delisting virtual assets.
A particularly noteworthy mandate is the FSC’s insistence that foreign VASPs must refrain from offering their services in Taiwan unless they have obtained the necessary approvals from the regulator. In explicit terms, the FSC states, “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 FSC is sending a clear message that it will not tolerate unregistered foreign crypto exchanges operating within its jurisdiction. This move is part of Taiwan’s broader efforts to regulate and oversee the cryptocurrency market effectively.
In addition to these regulatory guidelines, the FSC encourages VASPs to promote self-regulation within the cryptocurrency industry. It expects relevant VASP associations to formulate self-regulatory norms based on the guiding principles outlined by the authority.
Local Exchanges Join Forces
The FSC’s announcement coincides with local cryptocurrency exchanges taking matters into their own hands by establishing a joint self-regulatory association. On September 26, several prominent local exchanges, including Maicoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito, officially founded the Taiwan Virtual Asset Platform and Transaction Business Association. Their goal is to collaborate with regulators and foster industry growth while ensuring adherence to robust regulatory standards.
Global Players in Taiwan
Notably, this regulatory development impacts not only local exchanges but also major global crypto trading firms. Industry giants like Binance have been serving customers in Taiwan. Kraken, another prominent exchange, offers “full services to clients living in Taiwan.” Bybit, which supports Visa and Mastercard payments in countries like Taiwan, is also part of the cryptocurrency landscape in the region.
In August, Binance reportedly applied for registration in Taiwan under the Money Laundering Control Act and the FSC’s supervision. Kraken and Bybit have not yet responded to inquiries regarding this latest development.
This regulatory framework follows reports from earlier this month that the FSC had drafted ten guiding principles for managing digital currencies in the country, indicating its intention to clamp down on unregistered crypto exchanges. The FSC’s expanded role as the primary regulator of cryptocurrencies in Taiwan, effective from 2023, reinforces its commitment to fostering a secure and well-regulated cryptocurrency environment.