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Taiwan’s Financial Supervisory Commission (FSC) is set to introduce new rules to crypto exchanges, in a bid to ensure compliance and improve scrutiny of the market.
According to local news outlet Liberty Times, the financial watchdog will implement a registration system for crypto exchanges, which will be enacted in January 2025. During a session of the Legislative Yuan’s Finance Committee, Chairman Peng Chin-long disclosed that 26 exchanges have obtained compliance declarations in line with anti-money laundering (AML) regulations. He also mentioned that an additional 20 to 30 applications are currently under review.
The Financial Supervisory Commission is drafting a “Special Law on Virtual Asset Management” and has engaged a research team to conduct a comprehensive study. Peng Chin-long announced that public hearings will commence early next year, with multiple in-person hearings planned.
Preliminary discussions with relevant groups are already underway, focusing on key aspects such as business licensing requirements, consumer protection, capital standards, asset custody, market conduct standards, and business development. The draft is expected to be submitted to the Executive Yuan for approval by June next year.
The proposed legislation aims to provide clearer guidelines on licensing, consumer protection, and operational standards for crypto exchanges. It is also designed to bolster oversight of local virtual asset service providers (VASPs), strengthening the regulatory framework to create a safer and more transparent crypto market.
Taiwan aims to regulate crypto exchanges through anti-money laundering laws
Earlier this year, the regulator introduced new AML regulations for these platforms, requiring annual risk assessment reports and the implementation of strong internal control and audit systems to enhance oversight.
In July, ReadWrite reported that Taiwan passed new strict AML legislation that allows for up to two years in prison for illegal operators.
Around 76% of domestic investors generally use overseas virtual asset institutions, while the 26 operators in Taiwan that have completed anti-money laundering declarations remain relatively small in scale.
Peng Chin-long stressed that the market’s future growth should both focus on these 26 VASP operators, as well as address Taiwan’s international competitiveness and consider strategies for positioning and developing the local industry.
Featured image: Ideogram
