In Taiwan, a move to enhance oversight and customer protection in the cryptocurrency industry was recently made with the introduction of the Virtual Asset Management Bill to the unicameral parliament, the Legislative Yuan, on October 25, 2023. The 30-page bill outlines provisions for customer protection, regulatory obligations, and industry self-regulation.
The bill focuses on customer protection, requiring virtual asset service providers to separate customer funds from their reserve funds. Additionally, VASPs are expected to establish internal control and audit systems to maintain compliance. Joining the local trade association is also encouraged to foster industry self-regulation.
The introduction of the Virtual Asset Management Bill follows the creation of the Taiwan Virtual Asset Platform and Transaction Business Association, which is a collaborative effort by major cryptocurrency exchanges in Taiwan. In September 2023, the Taiwan’s Financial Supervisory Commission (FSC) issued industry guidelines for VASPs, restricting foreign VASPs from operating in Taiwan without obtaining necessary approvals from the regulator.
Binance, one of the world’s largest cryptocurrency exchanges, also sought registration in Taiwan, signalling its willingness to comply with local regulations. Moreover, Circle, BitoGroup, and Taiwan FamilyMart recently partnered to launch ‘Points-to-Crypto’ service in the country.
These developments demonstrate Taiwan’s evolving approach to cryptocurrency regulation, aiming to balance industry growth with necessary oversight and customer protection.
