Regulatory news: Taiwan’s Financial Supervisory Commission has finally released its long-awaited guidelines for crypto platforms, demonstrating a growing commitment to industry oversight.
See below for all the details.
New regulation for crypto exchanges in Taiwan: the details
As anticipated, Taiwan’s financial regulator has released a set of long-awaited guidelines aimed at virtual asset service providers (VASP), emphasizing the priority of consumer protection.
In accordance with the new guidelines, domestic crypto platforms must engage in segregation and custody of both corporate and customer assets.
It also requires the establishment of review standards for the pricing and removal of virtual assets, as well as strengthening transparency of information, according to the Financial Supervisory Commission in an official communication.
The latest guidelines also stipulate that offshore platforms wishing to operate in Taiwan must first register with the FSC.
Specifically, it points out the following:
“Foreign virtual asset platform operators, who are not registered in accordance with company laws and have not declared compliance with anti-money laundering regulations with the FSC, are not allowed to conduct business within Taiwan or target Taiwanese citizens.”
Previously, precisely last month, Binance, the world’s largest cryptocurrency exchange platform, submitted a request for registration in Taiwan to ensure compliance with AML regulations.
In addition, the FSC stressed that crypto platforms “are not allowed to initiate transactions involving derivative financial product transactions with virtual assets as underlying assets or virtual assets with security-like characteristics.”
Taiwan had previously required compliance with AML laws by virtual asset service providers (VASPs) since the introduction of AML regulations by the FSC in July 2021.
Taiwan’s crypto platforms consider the creation of an industry association
Following the publication of the new guidelines by the FSC, Taiwan’s crypto platforms are considering establishing an industry association and developing self-regulatory rules based on these guidelines.
Currently, nine crypto exchanges operating in Taiwan have formed a working group for the purpose of preparing an application to create a crypto industry association, scheduled for mid-October.
The working group consists of nine companies, including major Taiwanese platforms such as MaiCoin, BitoGroup and ACE. Winston Hsiao, co-founder of XREX and the group’s chief revenue officer, serves as the coordinator of the working group, the official note stated.
Wayne Huang, co-founder and CEO of Taipei-based cryptocurrency company XREX, commented on the new FSC guidelines stating the following:
“These could usher in a new chapter for the sector, providing legitimacy, oversight, a solid foundation for growth and an accelerated means of gaining public trust.”
Binance’s application for registration under the AML Act
Recently, the Taiwan Financial Supervisory Commission (FSC) notified several domestic cryptographic service providers that Binance has begun the registration process to adhere to AML regulations.
As of July 2021, Taiwan has indeed stipulated that virtual asset service providers (VASPs) must comply with local AML laws, as the cryptographic industry in the country remains largely unregulated.
However, at first and based on some sources, an FSC official had refused to confirm whether Binance had officially submitted registration documentation with the regulator.
In any case, the same had stressed that offshore crypto platforms operating in Taiwan are urged to comply with local AML regulations.
Despite the lack of regulation in Taiwan, Binance has established a local presence named “Binance International Limited Taiwan Branch (Seychelles),” as indicated in Department of Commerce records.
These registration documents reveal that the Taiwanese government approved the incorporation of Binance on 12 May 2023, with a registered capital of NT$30 million (equivalent to $944,000 USD) in Taiwanese territory.
Source: https://en.cryptonomist.ch/2023/09/26/taiwan-new-regulations-crypto-exchanges/