Taiwan's Upcoming Crypto Regulations

Taiwan’s financial watchdog is set to introduce new criteria, covering crypto asset listing and record keeping, as part of its upcoming “registration regulation” set to be enacted in January 2025.

Hsi-Ho Huang, director of the securities firms division of the Taiwan Financial Supervisory Commission, stated on Monday at the FinTechOn conference in Taipei that the FSC will require “virtual asset service providers” (VASPs) to complete compliance registration with new rules effective January 2025. Non-compliance may lead to criminal penalties, including imprisonment for up to two years.

Currently, VASPs must comply with anti-money laundering laws based on rules introduced in July 2021, which the new regulations will replace. The FSC, appointed as the main authority overseeing the crypto sector in March last year, announced these rules in October, with Huang providing more details on forthcoming requirements and the regulatory approach behind them.

The new rules aim to tighten scrutiny on key areas, including custody of fiat currency, information security, customer complaint handling procedures, record keeping, and information disclosure.

Huang emphasized that crypto trading platforms must establish clear procedures for listing and delisting crypto assets and implement measures to prevent unfair trading and detect abnormal price and volume fluctuations.

The regulator will also require crypto custodians to place client assets in trust or segregate them from trading platforms’ proprietary assets. Additionally, custodians must commission a CPA to issue annual reports for client assets.

Beyond compliance registration, the FSC is drafting a special law proposal specifically for crypto assets. Jin-Lung Peng, chair of the FSC, indicated at the forum that the regulator aims to submit the law proposal to the Executive Yuan, Taiwan’s highest administrative organ, in June 2025.

In June this year, the local crypto sector formed an industry association to create self-supervisory rules under government guidance.