31st October 2024 – (Taipei) Taiwan’s Financial Supervisory Commission (FSC) is poised to introduce a registration system for cryptocurrency exchanges by 30th November, enhancing oversight in the burgeoning digital asset market. This initiative, reported by local outlet Anue Juheng, is part of the FSC’s ongoing efforts to bolster compliance and scrutiny within the sector.
During a recent session with the Legislative Yuan’s Finance Committee, FSC chairman Peng Chin-long announced that 26 exchanges have already obtained compliance declarations under anti-money laundering (AML) laws, with an additional 20 to 30 applications currently under review. The FSC plans to conduct increased inspections of crypto exchanges, with six firms set for audits in the coming months, following previous inspections that identified significant compliance issues among larger operators.
In tandem with these measures, the FSC is drafting a “Special Law for Crypto Exchange Management,” aiming to clarify licensing requirements, consumer protection, and operational standards for exchanges. Public hearings on the proposed legislation are expected in early 2025.
This comprehensive approach reflects Taiwan’s challenges in balancing innovation with the necessity for consumer safety and regulatory compliance. Earlier this year, the regulator introduced new AML regulations mandating annual risk assessments and robust internal controls for virtual asset service providers (VASPs). Non-compliance with these regulations could lead to penalties, including imprisonment for up to two years or fines of NT$5 million.
Moreover, the FSC recently announced plans to trial crypto custody services through local banks, with applications expected to open in the first quarter of 2025. This follows Taiwan’s commitment to establishing itself as a global cryptocurrency hub, with stricter regulations on offshore exchanges that fail to register within its jurisdiction.
In September last year, the FSC also drafted ten guiding principles for VASPs to promote self-regulation, focusing on enhancing information disclosure and asset custody standards. The finalised guidelines are anticipated to be released by the end of this month.
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