Taiwan’s Crypto Clampdown: Bans Unregistered Foreign Crypto Exchanges

Taiwan’s Crypto Clampdown: Bans Unregistered Foreign Crypto Exchanges

Taiwan’s Financial Supervisory Commission (FSC) has
introduced a set of stringent rules, effectively banning unregistered foreign
cryptocurrency exchanges from operating within the country. This action occurs
as part of Taiwan’s commitment to enhancing investor protection and promoting
responsible practices within the crypto industry.

The FSC has outlined key measures to regulate the
cryptocurrency market within its borders. These guidelines, released on
September 26, specifically target virtual asset service providers (VASPs)
operating in Taiwan. The rules include industry-standard practices such as
segregating the exchange’s treasury assets from customer assets and
establishing mechanisms for listing and delisting crypto assets.

Notably, the FSC has imposed strict restrictions on foreign
VASPs, preventing them from offering their services in Taiwan unless they have
received the necessary approvals and registrations from the regulatory
authorities.

„Overseas virtual asset platform operators are not
allowed to solicit business within the territory of my country or from Chinese
citizens unless they have been registered in accordance with the Company Law,
submitted to the Financial Supervisory Commission and completed a declaration
of compliance with money laundering prevention laws,” the FSC stated.

Taiwan Forges a Path to Crypto Regulation

In addition to regulatory oversight, the FSC has urged VASPs
to engage in self-regulation within the cryptocurrency industry. Relevant VASP
associations are expected to formulate self-regulatory norms based on the
guiding principles set out by the authority.

„Platforms should implement customer protection
regulations based on the principles of fairness and reasonableness, equality,
reciprocity and good faith,” the FSC stated.

Besides that, Taiwanese lawmakers have proposed an amendment
to the law to create a dedicated bureau within the FSC specifically for
crypto-related matters. This proposal, if passed, will expand the FSC’s
regulatory capabilities to cover cryptocurrencies, adding to its existing
oversight of banking, securities, futures, insurance, and auditing.

FSC Joins Global Regulators

Taiwan’s FSC is the latest authority to address the need for
stricter regulations in the crypto sector. Drawing inspiration from similar
measures introduced by the European Union, Japan, and South Korea, Taiwan aims
to create a more secure environment for crypto investors and operators.

Last month, during a meeting with numerous domestic cryptocurrency
service providers, the FSC revealed that Binance was in the process of seeking
registration for AML compliance.

Although Binance operates in Taiwan, it is not yet fully
regulated by the local authorities. However, Binance has established a local
entity known as Binance International Limited Taiwan Branch.

Binance has also taken proactive steps to collaborate with
Taiwanese law enforcement agencies in the fight against cybercrime. In June,
the exchange partnered with Taiwan’s Criminal Investigation Bureau, sharing its
expertise in addressing digital asset-related crimes with over 200 Taiwanese
law enforcement officers.

This article was written by Jared Kirui at www.financemagnates.com.

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