The Financial Supervisory Commission (FSC) last week announced guidelines for virtual asset service providers (VASPs), six months after the Executive Yuan had tasked the regulator with overseeing virtual currency platforms and transactions to comply with rules against laundering and counter the potential financing of terrorism.
Virtual assets are broadly defined as digital representations of value that can be traded and used for payments or investment purposes. This includes cryptocurrencies such as bitcoin and other crypto assets, but does not include digital representations of fiat currencies or general securities and derivatives. A VASP is an entity or individual that provides services associated with virtual assets.
Amid concerns over virtual currency investments after the insolvencies of several overseas virtual asset exchanges last year, and following in the footsteps of international supervisory organizations and regulators in more closely monitoring the virtual currency sector, the commission said in a news release on Tuesday that it would bolster protection for customers using domestic VASPs under new guidelines.
Major points of the guidelines include the disclosure of information by VASPs, review procedures for product launches and withdrawals, the separation of assets between customers and platform operators, and the assurance of transparency and fairness in transactions. Preventing money laundering, promoting internal controls and external auditing, ensuring information security, enhancing customer asset custody, and managing so-called “hot” and “cold” crypto wallets are also part of the guidelines.
The regulator next plans to ask platform operators to establish a self-regulating mechanism that allows members of the sector to monitor their legal, ethical and security standards, as well as enhance internal controls and improve customer protection in accordance with the VASP guidelines, it said.
For the time being, the FSC seems to have no intention of seeking special legislation concerning the virtual asset sector and does not want to act as a comprehensive regulatory body for it nor offer licenses to VASPs as has occurred in Hong Kong, Japan and Singapore. The commission’s approach of relying on the guidelines and a self-regulating mechanism should give the sector room for further development and innovation in Taiwan.
Although the commission might be offering the sector an opportunity to build trust with the public, and a hands-off approach would be welcome news to VASPs, it would be better for the commission to at least reserve the power to inspect domestic virtual asset platforms, at least when things go wrong. In the long term, the commission should consider legislation or enhance its regulatory power to support healthy growth in the domestic virtual asset sector.
After all, the nation’s only law governing cryptocurrency trading is the Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises Handling Virtual Currency Platforms or Transactions (虛擬通貨平台及交易業務事業防制洗錢及打擊資恐辦法), which was implemented in June 2021, but might not apply to all potential contraventions in certain circumstances.
With investors being defrauded or experiencing losses related to virtual asset transactions in overseas markets, critics say Taiwan’s regulations offer no assistance or protection to domestic investors, and the commission’s announcement is much belated compared with its foreign peers.
As a result, the FSC must continue to review and adjust its regulatory measures on a rolling basis and accumulate feedback from domestic VASPs to ensure the sector’s long-term development. As virtual assets involve the affairs of various government agencies, the commission needs to cooperate closely with them and continue monitoring the actions of international organizations and regulators in determining how to appropriately regulate the sector.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
I have heard people equate the government’s stance on resisting forced unification with China or the conditional reinstatement of the military court system with the rise of the Nazis before World War II. The comparison is absurd. There is no meaningful parallel between the government and Nazi Germany, nor does such a mindset exist within the general public in Taiwan. It is important to remember that the German public bore some responsibility for the horrors of the Holocaust. Post-World War II Germany’s transitional justice efforts were rooted in a national reckoning and introspection. Many Jews were sent to concentration camps not
RSS