The Financial Supervisory Commission (FSC) announced it will propose a new crypto asset regulation draft for Taiwan in September 2024. According to a news report published by UDN on March 4th, FSC chairman Huang Tianmu stated that the upcoming draft law aims to create more effective regulations for crypto asset markets and ensure the safety of investors.
Crypto Legislation on the Agenda in Taiwan
In his speech, he also warned investors about the potential fraud risks associated with cryptocurrencies and alerted them to strict administrative penalties against criminals attempting to defraud investors. Huang emphasized in his speech the increasing connection between crypto assets and the traditional financial system, which endangers the latter. The committee will also develop laws to protect the stability of the old financial system from the risks of crypto assets.
Taiwanese lawmakers introduced the Crypto Asset Management Bill to the unicameral parliament on October 25th. The bill aims to provide better protection for investors and to properly regulate the industry. The bill also proposes fines ranging from two million Taiwanese dollars, worth 60,000 US dollars, to 20 million Taiwanese dollars, worth 600,000 US dollars, for unlicensed Crypto Asset Service Providers (VASP).
Taiwan and Cryptocurrency Exchanges
According to Gao Jingping, the deputy director of the Guarantee Bureau, the Taiwan Chamber of Commerce will also publish a study on Bitcoin exchange-traded funds in April. Tianmu also mentioned that Taiwan is considering accepting spot Bitcoin exchange-traded funds within its regulatory scope but warned market participants against investing in foreign crypto-based exchange-traded products.
The Taiwan Financial Supervisory Commission prohibits foreign crypto exchange companies from operating in Taiwan without the necessary approvals from the regulatory body. The rules were established following the formation of a self-regulatory association by the country’s leading cryptocurrency exchanges on September 26, 2023. Local exchanges such as BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito joined forces to support the crypto industry and collaborate with regulators.
The FSC granted the country’s first security token offering (STO) license to Cathay Securities on November 9, 2023, allowing the firm to issue tokenized bonds worth 930,000 dollars every six months.
