TAIPEI (Taiwan News) — Taiwan's Financial Supervisory Commission (FSC) on Tuesday (Sept. 26) released a comprehensive set of new rules governing the cryptocurrency market in Taiwan, including the banning of unregistered foreign cryptocurrency exchanges from soliciting business in Taiwan or from Taiwanese citizens.
The FSC officially announced new guiding principles for virtual asset service providers (VASP) in Taiwan, including 10 key points, such as requiring industry players to develop review mechanisms for the listing and delisting of virtual currencies. In March this year, the Cabinet designated the FSC as the supervisory authority for VASPs with financial investments or payment properties.
On April 26, the FSC announced that a new bureau responsible for supervising virtual assets called the Virtual Asset Bureau had been greenlit. In addition, nine domestic exchanges earlier this month formed the Taiwan Virtual Asset Service Provider Preparatory Office to integrate VASPs, ensure self-regulation, and establish communication channels with the government, reported Knowing News.
The FSC on Tuesday announced the following 10 new stringent guidelines for crypto exchanges:
1. Management of virtual asset Iissuance:
If virtual assets are issued through a platform, the issuer should publish a white paper on its website, and the cryptocurrency platform should also announce the issuer’s website link.
2. Review mechanism for listing and delisting virtual assets:
Review standards and procedures for the content of the white paper and listing and delisting of virtual assets should be established and incorporated into the internal control system.
3. Separate custody of platform assets and customer assets:
The platform shall separate and store the legal currency or virtual assets received from customers for virtual asset transactions and payment agency services from its own assets.
4. Transaction fairness and transparency:
The platform should formulate and announce virtual asset trading rules and should establish relevant mechanisms to ensure fair market transactions.
5. Contract drafting, advertising solicitation, and complaint handling:
Platforms should implement customer protection regulations based on the principles of fairness, reasonableness, equality, reciprocity, and integrity.
6. Management mechanisms for operating systems, information security, and hot and cold wallets:
The platform should establish a management system for its ongoing operations, information security, and private keys for hot and cold wallets.
7. Information announcements and disclosures:
The platform should provide full and comprehensive public disclosure of the above-mentioned issuance of virtual assets, product listings and delistings, asset separation and custody, transaction information and rules, and customer protection.
8. Internal control and organizational review:
The platform should establish mechanisms such as internal control and internal auditing systems, ensure that its operations are independent and objective, and agree to accept on-site inspections conducted by the Financial Supervisory Commission or authorized institutions.
9. Individual currency traders:
Persons engaged in a virtual asset business who declare compliance with money laundering prevention regulations to the Financial Supervisory Commission must provide statements of content and quality equivalent to that of a legal entity.
10. Overseas currency traders:
Overseas virtual asset platform operators are not allowed to solicit business within the territory of Taiwan or from Taiwanese citizens unless they have registered in accordance with the Company Act and completed a declaration of compliance with money laundering prevention laws with the Financial Supervisory Commission.