Taiwan's Financial Supervisory Commission (FSC) has introduced a set of stringent rules, effectively banning unregistered foreign cryptocurrency exchanges from operating within the country. This action occurs as part of Taiwan's commitment to enhancing investor protection and promoting responsible practices within the crypto industry.
The FSC has outlined key measures to regulate the cryptocurrency market within its borders. These guidelines, released on September 26, specifically target virtual asset service providers (VASPs) operating in Taiwan. The rules include industry-standard practices such as segregating the exchange's treasury assets from customer assets and establishing mechanisms for listing and delisting crypto assets.
Notably, the FSC has imposed strict restrictions on foreign VASPs, preventing them from offering their services in Taiwan unless they have received the necessary approval and registration from the regulatory authorities.
"Overseas virtual asset platform operators are not allowed to solicit business within the territory of my country or from Chinese citizens unless they have been registered in accordance with the Company Law, submitted to the Financial Supervisory Commission and completed a declaration of compliance with money laundering prevention laws," the FSC stated.
Taiwan Forges a Path to Crypto Regulation
In addition to regulatory oversight, the FSC has urged VASPs to engage in self-regulation within the cryptocurrency industry. Relevant VASP associations are expected to formulate self-regulatory norms based on the guiding principles set out by the authority.
"Platforms should implement customer protection regulations based on the principles of fairness and reasonableness, equality, reciprocity and good faith," the FSC added.
Besides that, Taiwanese lawmakers have proposed an amendment to the law to create a dedicated bureau within the FSC specifically for crypto-related matters. This proposal, if passed, will expand the FSC's regulatory capabilities to cover cryptocurrencies, adding to its existing oversight of banking, securities, futures, insurance, and auditing.
FSC Joins Global Regulators
Taiwan's FSC is the latest authority to address the need for stricter regulations in the crypto sector. Drawing inspiration from similar measures introduced by the European Union, Japan, and South Korea, Taiwan aims to create a more secure environment for crypto investors and operators.
Last month, during a meeting with numerous domestic cryptocurrency service providers, the FSC revealed that Binance was in the process of seeking registration for AML compliance. Although Binance operates in Taiwan, it is not yet fully regulated by the local authorities. However, Binance has established a local entity known as Binance International Limited Taiwan Branch.
Binance has also taken proactive steps to collaborate with Taiwanese law enforcement agencies in the fight against cybercrime. In June, the exchange partnered with Taiwan's Criminal Investigation Bureau to share its expertise in addressing digital asset-related crimes with over 200 Taiwanese law enforcement officers.
This article was written by Jared Kirui at www.financemagnates.com.
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