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Taiwan tightens crypto regulations with new FSC guidelines and major exchanges forming industry association.
On September 26, Taiwan’s Financial Supervisory Commission (FSC) released a comprehensive set of guidelines for virtual asset service providers (VASPs), marking an important step in regulating the country’s burgeoning cryptocurrency market.
Around the same time, nine major crypto exchanges in Taiwan have formed a working group to establish an industry association. The latest measure is a proactive step towards self-regulation and alignment with the FSC’s recently published guidelines.
FSC Guidelines for crypto Exchanges
The FSC guidelines are extensive and focus on several key areas. First, they require national crypto platforms to ensure the separation and custody of company and customer assets. This aims to improve the security and integrity of funds held on these platforms.
Second, the guidelines require the establishment of review standards for the listing and delisting of virtual assets. This ensures that only legitimate and compliant tokens are traded on Taiwanese platforms.
Third, the guidelines call for greater disclosure of information to improve transparency. This includes providing clear and accessible information on trading fees, withdrawal limits and other operational aspects.
Additionally, offshore exchanges wishing to operate in Taiwan must register with the FSC and comply with the country’s anti-money laundering (AML) regulations. The guidelines are explicit that foreign virtual asset platforms that have not registered cannot solicit business within Taiwan or target Taiwanese citizens.
Industry association takes shape
In response to the FSC guidelines, nine major crypto exchanges in Taiwan, including MaiCoin, BitoGroup, and ACE, have initiated the formation of an industry association. The working group is led by Winston Hsiao, co-founder and CRO of the XREX group.
The association aims to submit its application in mid-October and is expected to draft self-monitoring standards based on FSC guidelines.
Wayne Huang, co-founder and group CEO of Taipei-based crypto exchange XREX, welcomed the new FSC guidelines. He stated that these could “give rise to a new industry, providing this new industry with legitimacy, oversight, a solid path to growth, and an accelerated means to acquire public trust.”
The FSC guidelines and the formation of the industry association are considered fundamental steps in Taiwan’s crypto regulatory landscape. They are expected to foster a more secure and transparent environment for both investors and service providers.
In August, Binance, the world leader in cryptocurrency trading volume, filed a registration application in Taiwan. The exchange has been operating in the country through its local subsidiary, Binance International Limited Taiwan Branch (Seychelles).
