The Financial Supervisory Commission (FSC) of Taiwan has released long-awaited rules for crypto platforms as it seeks to enhance its oversight of the cryptocurrency sector. The new rules require offshore crypto exchanges intending to operate in Taiwan to register with the FSC.
Latest Crypto Regulations Announced by FSC
Taiwan’s financial regulator, the FSC, has introduced multiple rules that prioritize customer protection for virtual asset service providers (VASPs). According to the FSC, the new rules require local crypto platforms to keep and maintain companies’ and customers’ assets separately, establish review standards for virtual asset listing and delisting, and strengthen information flow in a completely transparent manner.
The eagerly awaited rules now mandate that offshore crypto exchanges wishing to operate in Taiwan must register with the FSC. The guidelines accompanying the rules state that “foreign virtual asset platform operators who have not registered under company laws and have not declared their compliance with anti-money laundering regulations to the FSC cannot operate within Taiwan or target Taiwanese citizens.”
The FSC also stated that crypto platforms are not allowed to engage in activities involving virtual asset derivatives or virtual asset businesses with securities-like features. Previously, Taiwan had made it mandatory for VASPs to comply with anti-money laundering laws since the FSC implemented anti-money laundering rules in July 2021.
Self-Regulatory Rules
Following the official publication of the latest rules by the FSC, it is expected that crypto platforms in Taiwan will form an industry alliance and establish self-regulatory rules based on the guidelines. A working group has been formed as a preparatory measure to establish a crypto industry alliance that aims to apply for the formation of an association in mid-October.
The working group currently consists of nine crypto companies in Taiwan, including major crypto exchanges such as MaiCoin, BitoGroup, and ACE. According to a statement from the working group, Winston Hsiao, co-founder and Group CRO of XREX, is responsible for the group’s management.
Wayne Huang, co-founder and CEO of Taipei-based crypto exchange XREX, believes that the new rules introduced by the FSC will give rise to a new industry. He stated that these rules will provide legitimacy, supervision, a strong path for growth, and an accelerated means to gain public trust in this new sector.
