Taiwan took a significant step towards regulating the emerging cryptocurrency sector with the establishment of a new industry association. This move aligns with the government’s efforts to bring more oversight and self-regulation to the sector. Taiwan Virtual Asset Service Providers Association was officially established today under the guidance of the Financial Supervisory Commission (FSC), marking a crucial milestone for cryptocurrency regulation in the country.
The Association Consists of 24 Cryptocurrency Companies
The newly formed association comprises 24 cryptocurrency companies, all registered with the FSC for anti-money laundering (AML) compliance. This registration, mandatory for cryptocurrency companies operating in Taiwan, reflects the government’s commitment to preventing crimes in the cryptocurrency space. The association is chaired by Titan Cheng, founder and CEO of Taiwan’s leading cryptocurrency exchange BitoPro. Winston Hsiao, co-founder and chief revenue officer of XREX, will serve as vice-chairman.
The establishment of such an association is seen as a critical step for Taiwan to increase oversight over cryptocurrency trading companies. The government has tasked the association with developing self-regulation rules to govern the activities of member companies. This self-regulation is expected to support the integrity of the sector and align with government expectations.
Hsiho Huang, director of the securities firms division at the FSC, emphasized the importance of the virtual asset industry’s development for the broader society and economy. Speaking at the launch meeting, Huang underscored the FSC’s commitment to promoting a healthy cryptocurrency ecosystem that benefits both the sector and the public.
Will Create Self-Regulating Guidelines
The primary task of the association post-establishment is to create self-regulating guidelines. These guidelines aim to implement classification and rating management for Virtual Asset Service Providers (VASPs). The goal is to ensure the sector’s growth aligns with regulatory standards while protecting consumer rights and interests.
Since July 2021, Taiwan has already applied AML requirements to cryptocurrency service providers. The FSC’s implementation of these rules was the first regulatory step to control financial risks associated with digital assets. However, the cryptocurrency industry remains largely unregulated beyond these AML provisions.
As another step to tighten regulation, the Taiwan Ministry of Justice proposed amendments to existing AML laws last month. These amendments require both domestic and foreign cryptocurrency companies wishing to operate in Taiwan to register for AML compliance. Any non-compliance could result in severe penalties, including up to two years of imprisonment.
