- Taiwan’s guidelines have a strong focus on fostering self-regulation within the virtual asset services industry.
- Internal control and audit systems are also a part of the regulatory framework.
Taiwan’s Financial Supervisory Commission (FSC) unveiled a set of comprehensive guidelines for virtual asset service providers (VASPs). In September, the FSC will officially introduce its “Guiding Principles for the Management of Virtual Asset Platforms and Trading Businesses (VASP)”. This aligns Taiwan’s approach with international standards and marks a significant step towards responsible crypto regulation and oversight.
The guidelines consist of ten key principles. These principles focus on fostering self-regulation within the virtual asset services industry. Furthermore, they also encompass stringent information disclosure requirements, standards for asset listing and delisting, separation of platform and customer assets, and robust enforcement of anti-money laundering measures.
One of the central aspects of these guidelines is the crackdown on illegal business solicitation by foreign currency dealers. Offshore crypto exchanges will face restrictions from operating onshore unless they adhere to the forthcoming guidelines. The FSC has assumed the role of supervising virtual asset financial investment and payment activities in Taiwan. This follows a government decision in March 2023 to enhance crypto asset regulation.
Comprehensive guidelines to foster responsible crypto oversight
To ensure transaction fairness, transparency, and security, companies will need to strengthen various aspects, including contract formulation, advertising practices, and complaint handling. The FSC also managed to focus on the establishment of systems for continued operations, information security, and the management of private keys in hot and cold wallets. Internal control and audit systems are also a part of the regulatory framework.
Furthermore, exchanges and firms will need to declare compliance with anti-money laundering and counter-financing of terrorism laws. Overseas virtual asset platform operators looking to conduct business in Taiwan will be required to register with the FSC. They will also need to adhere to local regulations while declaring their compliance with anti-money laundering rules.
Taiwan’s regulatory approach has been influenced by regulatory frameworks in the European Union, Singapore, and Japan.