Taiwan’s FSC plans crypto draft regulations by September
The Financial Supervisory Commission (FSC) of Taiwan has disclosed its intention to introduce a fresh draft of digital asset regulations for the nation come September 2024.
The forthcoming draft bill seeks to establish more robust regulations for digital asset markets, prioritizing investor safety, as announced by Huang Tien-mu, the chairman of FSC. That’s according to a March 4 report by local media outlet, United Daily News (UDN).
Addressing customer protection
In October, Taiwanese legislators introduced the Virtual Asset Management Bill to parliament, a move aimed at fortifying customer protection and ensuring effective industry supervision. The bill encompasses provisions that could impose fines ranging from two million Taiwanese dollars ($63,000) to 20 million Taiwanese dollars on unlicensed virtual asset service providers (VASPs).
Around that time, the authorities had a particular concern with regard to the operation of foreign and offshore VASPs within the Taiwanese market. Like Hong Kong, Taiwan also had seen some negative impact due to the fraudulent activity of the Dubai-based JPEX crypto platform.
The FSC has already barred foreign VASPs from operating in Taiwan without requisite approvals from the regulator. These measures were instituted following the establishment of a self-regulatory association by major cryptocurrency exchanges in the country, aiming to foster collaboration with regulators.
Stricter regulations
Per the latest report, Chairman Huang Tien-mu outlined the FSC's plan to propose a draft bill targeting virtual currencies in September of the current year. This initiative seeks to bolster investor safeguarding and enhance regulatory oversight over the virtual currency sector.
Concern has also been raised relative to native exchanges, in addition to offshore VASPs. In November, an investigation was opened into the Bitgin exchange, amid alleged money laundering activity. Shortly afterwards, another probe was launched into the ACE Exchange, amid allegations of money laundering and fraud.
Highlighting the imperative for stricter regulations, Huang underscored the potential fraud risks tied to digital currencies. He issued a stern warning, signaling severe administrative penalties for merchants engaged in fraudulent activities aimed at investors.
Moreover, the regulator expressed concerns about the growing interconnection between digital assets and the conventional financial system. He emphasized the need for laws to shield the stability of traditional financial systems from the inherent risks posed by digital assets.
Addressing apprehensions regarding the misuse of virtual currencies for fraudulent endeavors, Huang cautioned of stringent administrative penalties awaiting both domestic and foreign currency traders found guilty.
ETF considerations
Taiwan's Chamber of Commerce is poised to unveil a study on Bitcoin exchange-traded funds (ETFs) in April. Gao Jingping, Deputy Director of the Securities and Futures Bureau at the Financial Supervisory Commission, indicated Taiwan's contemplation of endorsing spot Bitcoin ETFs under regulatory oversight. However, he advised against investing in foreign crypto-based exchange-traded products.
Reports from local media in December suggested that the FSC will closely monitor Bitcoin ETFs to assess their potential and gauge public demand. The FSC intends to release research findings in April, which will influence the fate of Bitcoin ETFs in Taiwan. Positive findings may pave the way for Taiwanese investors to resume acquiring overseas Bitcoin ETFs.
This initiative unfolds amid heightened global demand for Bitcoin ETFs, which recently contributed to Bitcoin's surge to almost $69,000.
