Taiwan Set to Introduce New Crypto Exchange Rules in January 2025

Taiwan's Financial Supervisory Commission (FSC) is set to introduce new rules to crypto exchanges within its jurisdiction. Per the report, Hsi-Ho Huang

Taiwan’s Financial Supervisory Commission (FSC) will introduce new rules for crypto exchanges in the country, stipulating that they must register with the regulator by January 2025 or face penalties.

The new rules will give the FSC greater oversight over crypto exchange activities, including exchange listing procedures and customer protection measures.

Taiwan’s Financial Supervisory Commission (FSC) is set to introduce new rules for crypto exchanges in the country, stipulating that they must register with the regulator by January 2025 or face penalties, according to a report by local news outlet MoneyDJ on Thursday.

The new rules will give the FSC greater oversight over crypto exchange activities, including exchange listing procedures and customer protection measures.

VASPs to register for specific criteria on listing, record-keeping

The upcoming “registration regulation” will set specific criteria for listing and record-keeping on crypto platforms in Taiwan.

FSC’s director of securities firms division Hsi-Ho Huang shared the updated compliance requirements at the FinTechOn conference in Taipei on Wednesday.

The new rules will apply to all “virtual asset service providers” (VASPs) operating in Taiwan, according to the official. Once the rule comes into effect by January, VASPs will need to register for compliance.

It is important to note that the new rule is an upgrade to the recent Anti-Money Laundering (AML) rule, which the FSC implemented last month.

The regulator also highlighted the implications of non-compliance, stating that platforms that fail to adhere to the new registration regulation may face severe penalties.

This includes executives of non-compliant platforms facing possible imprisonment for up to two years.

Key areas of focus for Taiwan’s new crypto rule

With its new regulation, the FSC appears to be aiming to address several areas that are crucial to Taiwan’s crypto development, including the custody of fiat currencies, information security, handling customer complaints, record-keeping and clear disclosure of information to the public.

In light of this, the new compliance rules will prioritize transparency, consumer protection and ensuring fair trading practices across all crypto exchanges.

To achieve this goal, a major aspect that the new regulation will strictly enforce is that it will require crypto platforms to follow well laid out procedures for listing and delisting digital assets.

Furthermore, these platforms must implement systems to detect any suspicious activity, such as abnormal price changes or trading volume, to prevent any forms of market manipulation.

For better security, the FSC will also require crypto custodians to separate client assets from the platform’s operational funds.

These assets must either be held in trust or separated to protect clients’ investments. Moreover, custodians must arrange for an independent Certified Public Accountant (CPA) to review and report on client assets annually.

Special law proposal in the works

Apart from the compliance registration rules, the FSC is also reportedly working on a separate law specifically designed to regulate crypto assets.

According to FSC Chair Jin-Lung Peng, the commission has made significant progress on this legislation. The plan is to submit the proposal to the Executive Yuan, Taiwan’s top administrative body, by June 2025.

On a broader note, Taiwan’s efforts in crypto regulation come amid a global trend of countries paying closer attention to their crypto industries, especially given the risks and potential for market manipulation in the space.