Taiwan Implements New Digital Asset Regulations to Protect Investors and Promote Innovation

Taiwan is taking steps to regulate the digital asset industry and protect investors. The Taiwan Financial Supervisory Commission (FSC) has drafted new guidelines aimed at striking a balance between fostering innovation and ensuring investor safety.

The ten guiding principles set the FSC cover various aspects of the digital asset industry. One important regulation is the crackdown on offshore exchanges that target Taiwanese investors without obtaining FSC licenses. This move brings Taiwan in line with other countries like Canada, Cyprus, Austria, and the Netherlands that have taken action against exchanges such as Binance, Bitfinex, and Kraken for violating regulations in multiple jurisdictions.

In addition to cracking down on rogue exchanges, Taiwan is also implementing stricter requirements for virtual asset service providers (VASPs). These providers will now need the FSC’s approval before publishing advertisements and will be required to segregate customer assets from operating capital. They must also establish robust anti-money laundering programs.

The FSC has also banned complex derivative products, citing concerns over their suitability for retail investors. Offenders could face up to seven years in prison.

The new guidelines also address token issuance. VASPs will be required to disclose their white paper to the FSC, increasing transparency and accountability.

Taiwan has experienced the negative impact of unregulated digital asset platforms, with the collapse of FTX affecting a large number of users in the country. As a result, the FSC has taken on the role of digital asset watchdog, with a particular focus on payment and trading-related assets. However, the agency does not currently regulate non-fungible tokens (NFTs), acknowledging their complexity and the need for further regulatory development in this area.

By implementing these regulations, Taiwan aims to create a safer environment for investors while still fostering innovation in the digital asset industry.

Sources:

– “Taiwan Financial Supervisory Commission sets 10 guiding principles for digital-asset industry regulation” – Business Standard

– “Binance, Several More Crypto Exchanges Face Regulatory Backlash Across the Globe” – CoinGeek

– “Taiwan Cracks Down on Unregulated Exchanges Amid FTX Collapse” – Coinfomania