Taiwan’s financial regulator, the Financial Supervisory Commission (FSC), has recently unveiled a set of guiding principles specifically tailored for crypto-related firms and businesses. This significant development brings Taiwan closer to achieving regulatory clarity within its cryptocurrency industry.

In a press release published on September 26, the FSC introduced the “Guiding Principles for the Management of Virtual Asset Platforms and Transaction Businesses (VASP).” These new guidelines emphasize customer protection and cover various aspects including transaction information transparency, customer asset custody methods, external expert assistance, internal control management by platform operators, and more.

To enforce these principles, domestic virtual asset platforms are now required to segregate company assets and customer funds, establish a review procedure for listing and delisting crypto assets, and ensure full disclosure of necessary information. Moreover, the guidelines also address the operation of offshore virtual asset platforms in Taiwan. Unless they have been registered under the company laws and declared anti-money laundering (AML) compliant, overseas crypto platforms are prohibited from soliciting business within the country or targeting Taiwanese nationals.

It is worth mentioning that prior to this new regulatory framework, Taiwan’s cryptocurrency landscape remained largely unregulated. However, the FSC did introduce rules against money laundering in 2021, mandating all digital asset platforms in the country to comply with these regulations.

In addition to these guidelines, the FSC encourages VASP operators in Taiwan to establish relevant associations to promote self-discipline within the industry. Acting in line with this recommendation, nine major Taiwanese crypto firms, including MaiCoin Group, BitoGroup, and Ace Exchange, have formed a preparatory group for an industry association. This association aims to create self-supervisory statutes based on the guiding principles provided by the FSC.

Wang Chenhuan, President of Ace Exchange, expressed his views on the association, stating, “The Association is a family and a beacon. It guides us in the right direction, collects information, sets standards, builds consensus, speaks on our behalf, and leads us to further progress.”

The preparatory group, consisting of BitstreetX, HOYA BIT, BitoPro, BITGIN, Rybit, XREX, and Shangbito, plans to submit an application for the industry association in mid-October, aligning with the timing of the virtual asset guidelines.

Establishing this VASP association will contribute to the advancement and sustainable growth of Taiwan’s domestic virtual currency industry. The collaboration among these major players in the crypto space signifies a united effort to adhere to regulatory standards, ensuring the protection and confidence of both customers and the broader market.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.