In a bid to bolster oversight in the burgeoning cryptocurrency sector, Taiwan’s Financial Supervisory Commission (FSC) has rolled out its long-awaited guidelines for crypto platforms. These guidelines, released today, revolve predominantly around ensuring customer protection and industry standardization.
The FSC’s pronouncement emphasizes several critical points. At the forefront is the mandate that domestic crypto platforms maintain a strict division between company and customer assets. Additionally, they must lay down clear criteria for listing and delisting virtual assets and amplify the transparency of their information disclosure.
Foreign Exchanges Must Register in Taiwan to Operate Legally
Further tightening the leash on offshore exchanges aiming to penetrate the Taiwanese market, the FSC has made it mandatory for these platforms to register with them.
“Unregistered foreign virtual asset platform operators, especially those not adhering to anti-money laundering regulations, are barred from either soliciting business in Taiwan or targeting its nationals,”
Segment taken from the Taiwanese guidelines
This comes in the wake of recent news which revealed that Binance, the globally renowned crypto exchange, is in the process of obtaining registration in Taiwan, keeping in line with AML compliance.
Additionally, the FSC delineated clear boundaries for crypto platforms, emphasizing that they cannot delve into operations that involve virtual assets as underlying assets for derivative financial product transactions or virtual businesses resembling securities.
Precedence and Future Self-Regulation in Taiwan
Recall that Taiwan had already been on the path of regulating the crypto industry. Since July 2021, VASPs were mandated to adhere to anti-money laundering laws, a move initiated by the FSC.
With these new guidelines in place, there’s an undercurrent of anticipation in Taiwan’s crypto community. There’s an expectancy that these platforms will consolidate to form an industry association and carve out self-regulatory rules echoing the FSC’s guidelines.
In preparation for this anticipated convergence, nine prominent crypto exchanges in Taiwan, including major players like MaiCoin, BitoGroup, and ACE, have formed a preparatory working group. Their objective? To establish a dedicated crypto industry association and submit a formal application by mid-October. Spearheading this initiative is Winston Hsiao, the co-founder and Group CRO of XREX, who’s been designated as the convener of this working group.
Wayne Huang, the co-founder and Group CEO of the Taipei-centric crypto exchange XREX, shared his insights with The Block. He expressed optimism that the FSC’s fresh guidelines might act as a catalyst, paving the way for the emergence of a new industry niche. In his view, these guidelines are instrumental in legitimizing this sector, fostering growth, and swiftly garnering public trust.
Crypto Regulations Around the World: Quick Take
Regulation often walks a thin line between stifling innovation and ensuring security. With Taiwan’s latest move, the nation seeks to find a harmonious balance in the crypto realm. But as nations grapple with the ever-evolving crypto landscape, one wonders if static guidelines can truly keep pace with dynamic innovation. It’s a game of cat and mouse, where the rules are constantly being rewritten.