Taiwan is set to impose restrictions on offshore cryptocurrency exchanges operating within its jurisdiction unless they gain the required registration.
The country’s Financial Supervisory Commission (FSC) has drafted ten guiding principles for virtual asset services providers (VASPs) to establish self-regulatory rules, according to a report by Taiwan’s semi-official Central News Agency.
The guiding principles, expected to be officially released by the end of this month, will focus on various aspects.
More specifically, the guidelines are expected to strengthen information disclosure, establish review standards for virtual asset listing and delisting, and ensure the separation and custody of companies’ and customers’ assets.
FSC to Ban Unregistered Overseas Firms from Soliciting Business
The FSC plans to strictly prohibit illegal business solicitation by foreign crypto firms.
It will mandate foreign VASPs to register in accordance with company law and declare their compliance with anti-money laundering regulations to the FSC.
Failure to do so will result in these firms being barred from soliciting business within Taiwan or from domestic residents.
Taiwan has recently appointed the Financial Supervisory Commission as the chief regulator for virtual-asset service providers as the country aims to introduce detailed guidelines by the end of September.
Taiwan has two financial regulators: the Central Bank of the Republic of China (Taiwan’s official name) and the FSC.
The Central Bank regulates monetary policy and foreign exchange regulations while the FSC has a broad remit over everything from banking regulation, securities, and futures, to anti-money laundering.
Meanwhile, the FSC won’t be regulating non-fungible tokens (NFT).
To further promote the development of self-regulatory guidelines, the Ministry of Economic Affairs in Taiwan recently proposed the addition of a new business category in relevant regulations.
The move is aimed at enabling cryptocurrency-related companies to establish industry associations, paving the way for enhanced self-regulation.
Binance Seeking to Register in Taiwan
Last month, it was revealed that Binance, the world’s largest cryptocurrency exchange, was seeking registration in Taiwan to ensure compliance with anti-money laundering measures.
While Binance is currently unregulated in Taiwan, it has established a local entity called “Binance International Limited Taiwan Branch (Seychelles)” as per the Department of Commerce’s database.
The registration information indicates that Binance’s company registration was approved on May 12, 2023, with a registered capital of NT$30 million ($937,000) in Taiwan.
In July, Binance also engaged with Taiwan’s Criminal Investigation Bureau, collaborating to aid over 200 law enforcement officers in tackling digital asset-related crime.
As reported, telecommunications giant Taiwan Mobile is also in talks with local crypto platforms about potential partnerships and even an investment in one of the businesses.
The government-licensed wireless service provider is exploring opportunities for collaboration with blockchain-enabled financial institutions, including Taiwan-based XREX.