Key Points:
The FSC’s “Guiding Principles for the Management of Virtual Asset Platforms and Trading Businesses (VASP)” will be officially unveiled before the end of September, as reported by local news agencies. These guidelines encompass ten key principles aimed at fostering self-regulation within the virtual asset services industry.
The FSC’s approach includes stringent information disclosure requirements, the establishment of standards for listing and delisting assets, the separation of platform and customer assets, and the enforcement of anti-money laundering measures.
The FSC also intends to crack down on illegal business solicitation by foreign currency dealers.
Taiwan plans to restrict offshore crypto exchanges from operating onshore unless they comply with these forthcoming guidelines. The FSC will assume the role of supervising virtual asset financial investment and payment activities, following the government’s decision in March 2023 to enhance crypto asset regulation.
The FSC will further emphasize transaction fairness, transparency, and security by requiring companies to strengthen contract formulation, advertising practices, and complaint handling.
They will also establish systems for continued operations, information security, and the management of private keys in hot and cold wallets, alongside internal control and audit systems.
Additionally, the FSC will require exchanges and firms to declare compliance with anti-money laundering and counter-financing of terrorism laws. Overseas virtual asset platform operators must register with the FSC to conduct business in Taiwan.
Notably, the guidelines aim to prevent foreign VASPs from illegally soliciting business in Taiwan unless they adhere to local regulations and declare compliance with anti-money laundering rules.
Taiwan‘s regulatory approach aligns with international standards and draws inspiration from regulatory frameworks in the European Union, Singapore, and Japan.
In a landscape where mainland China has imposed a complete ban on crypto trading and mining, Taiwan’s move to establish these guiding principles represents a significant step towards responsible crypto regulation and oversight.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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