Taiwan's Financial Supervisory Commission (FSC) is strengthening protections for cryptocurrency investors through the introduction of new regulations.
On September 26, the FSC outlined the key elements for overseeing Taiwan's cryptocurrency market and issued industry guidelines for virtual asset service providers (VASPs) operating within the country.
These guidelines include well-established industry standards, such as the requirement for VASPs to segregate exchange financial assets from customer assets and to establish review mechanisms for adding or removing virtual assets from their platforms.
Additionally, the FSC mandates that foreign-based VASPs cannot offer services in Taiwan without obtaining the necessary approvals from local regulatory authorities. The FSC stated, "Overseas virtual asset platform operators are not allowed to conduct business within the country without registering in accordance with the law."
The regulator also encourages VASPs to promote self-regulation within the cryptocurrency industry. It anticipates that relevant VASP associations will formulate self-regulatory standards based on the provided guidance. Notably, major Taiwanese cryptocurrency exchanges recently announced the formation of a joint self-regulatory association. On September 26, local exchanges including Maicoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, Shangbito, and others officially established the Taiwan Virtual Asset Platform and Trading Business Association. Their aim is to foster industry development and collaborate with regulatory agencies.
In addition to local exchanges, significant global cryptocurrency trading firms like Binance have also been providing services to Taiwanese customers. As of now, Kraken exchange claims to "offer full services to clients residing in Taiwan," while Bybit exchange supports Visa and Mastercard payments in countries like Taiwan, according to its website.
In August, reports indicated that Binance had applied to register in Taiwan under the Money Laundering Control Act and the oversight of the FSC.
Bybit declined to comment on its operations in Taiwan, and Kraken exchange did not immediately respond to inquiries.
This development follows local reports from September 7, which stated that the FSC had formulated a 10-point draft guideline for regulating digital currencies in Taiwan. The FSC's intention is to restrict unregistered cryptocurrency exchanges as part of its broader framework, as it became the primary regulator for cryptocurrencies in the country in 2023.
