Taiwan's FSC Unveils New Regulations Enhancing Cryptocurrency Investor Protections
Summary:
The Taiwanese Financial Supervisory Commission (FSC) enhances protections for cryptocurrency investors through new regulations. The FSC released guidelines for Virtual Asset Service Providers (VASP), mandating the separation of exchange and client assets and making necessary approvals obligatory for foreign VASPs in Taiwan. The FSC encourages industry self-regulation, evident by the formation of the Taiwan VASP Association. International firms also engage with Taiwanese customers while ensuring compliance with local laws. The FSC, set to become the principal crypto regulator by 2023, drafted ten principles for managing cryptocurrencies, including limiting unregistered exchanges.
The Taiwanese Financial Supervisory Commission (FSC) is taking steps to enhance safeguards for cryptocurrency investors via the implementation of fresh regulations. The FSC has outlined its strategy for managing the digital asset market in Taiwan and shared a framework for virtual asset service providers (VASP) on September 26. This framework includes industry-standard practices such as distinguishing between the reserves of exchanges and those of clients, in addition to establishing procedural standards for including or removing digital assets from listings.
The FSC has mandated that all overseas VASPs operating in Taiwan must cease activity unless they have the necessary authorizations from regulatory bodies. The commission stated that international digital asset platform operators are forbidden from running their businesses within Taiwan unless they have fulfilled all legal registration requirements.
Moreover, the FSC advocates for self-regulation within the digital asset sector, encouraging VASPs to establish their self-governing standards based on the guidelines. As part of this shift, key cryptocurrency exchanges in Taiwan are launching a collective self-regulatory organization. On September 26, local platforms, including Maicoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito, officially organized the Taiwan VASP Association with the objective of boosting industry growth and assisting authorities.
Other major global firms, such as Binance, also cater to a Taiwanese client base. At present, the Kraken exchange provides comprehensive services to Taiwanese customers. ByBit exchange facilitates Visa and Mastercard transactions in Taiwan, as stated on its official website.
In August, Binance reportedly made an application to register in Taiwan under the Money Laundering Control Act and the FSC. Kraken and ByBit have not provided any comments on this development as of the time of reporting.
This development comes shortly after reports surfaced on September 7 indicating that the FSC had created a draft outlining ten principles for managing cryptocurrencies. The intent is to limit the operations of non-registered exchanges. This move coincides with the FSC taking up the mantle of being the principal cryptocurrency overseer in Taiwan from 2023.
Published At
9/26/2023 11:52:40 AM
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