Taiwan Proposes Draft Crypto Act; Legislation Clears In First Reading

• Taiwan proposed a draft crypto act to the Legislative Yuan for the first time today.
• In September, Taiwan’s FSC released guidelines for virtual asset service providers.
• Lawmaker Yung-Chang Chiang noted that the new set of guidelines lacks legal enforceability.

In an update earlier today, Taiwan proposed a draft crypto act for its first reading. According to official documents, the proposal – which is aimed at governing cryptocurrency assets successfully cleared the first reading in the Legislative Yuan, Taiwan’s legislative body. Yung-Chang Chiang, one of the lawmakers in the Legislative Yuan who co-authored the special act, conveyed that,

After the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage. We hope that the Financial Supervisory Commission (FSC) can also submit their version of a draft bill to the legislature, allowing various sectors of society to further consolidate consensus during the process.

On September 26, Taiwan’s FSC released a set of guidelines for virtual asset service providers (VASPs) with an added focus on safeguarding customer interests. These guidelines emphasized that local crypto platforms are required to maintain clear segregation of corporate and customer assets, set up review standards for assessing the listing and delisting of virtual assets, and enhance transparency in their information disclosure practices.

Despite the new rules established through a potential industry association, Chiang said these measures lack legal enforceability, as noted by the lawmaker. Chiang further explained that with the authority provided by this unique legislation, regulatory authorities can impose administrative penalties on operators who violate these self-regulation rules. Therefore, the lack of a special law would inhibit regulators’ ability to impose penalties.

Earlier in September, Taiwan was seeking input from other countries on the matter of regulating crypto-related enterprises and firms within the nation. The FSC was reportedly organizing a public hearing to develop Guiding Principles for the Management of Virtual Asset Platforms and Trading Businesses (VASP), to concentrate on factors including strengthening the management of virtual asset issuance, developing a review mechanism for the listing and delisting of virtual assets, and distinguishing platform assets and customer assets.