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Taiwan designates cryptocurrency firms 'virtual currency platforms and trading businesses'

Proactive moves, including regulation, called for to close crypto loopholes and protect local investors

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Ministry of Economic Affairs main building. 

Ministry of Economic Affairs main building.  (Agencies photo)

TAIPEI (Taiwan News) — The Ministry of Economic Affairs (MOEA) has formalized the designation of business activities surrounding cryptocurrencies and named a supervisory authority after years of regulatory ambiguity on the virtual currency market.

Led by the rise of Bitcoin, cryptocurrency businesses and blockchain companies have sprung up over the past few years in Taiwan, which was once home to the dissolved crypto exchange Cobinhood.

In a Cabinet meeting on Monday (Nov. 15), the MOEA was said to have concluded that cryptocurrency businesses will be listed under the category of "finance, insurance and real estate" as "virtual currency platforms and trading businesses" rather than under the category of "software design services."

The Financial Supervisory Commission (FSC) will accordingly serve as the main authority responsible and work with tax and law departments to set up rules to regulate the evolving but volatile cryptocurrency market.

The first Bitcoin futures exchange-traded fund (ETF) began trading last month in the U.S., and the market capitalization recently exceeded US$3 trillion (NT$83 trillion). Taiwan's legislative body is demanding proactive moves to close crypto loopholes and protect local investors and consumers.

Meanwhile, Security token offerings (STO), a type of public offering for digital tokens using blockchain or distributed ledger technology, will be listed under the subcategory of securities firms and be subject to the same supervision as existing businesses in the securities industry.