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Taiwan Financial Supervisory Commission (FSC) is preparing to enforce comprehensive regulations for cryptocurrency platforms in 2025. Hsi-Ho Huang, who leads the FSC’s securities firms division, highlighted the new “registration regulation” during the FinTechOn conference in Taipei, underscoring that virtual asset service providers (VASPs) must complete compliance registration or risk severe penalties, including prison sentences of up to two years.
These updated guidelines are more rigorous than Taiwan’s existing AML laws for VASPs, introduced by the FSC in 2021. The new rules will demand greater transparency and controls over areas like asset custody, data security, customer complaints, and information disclosure. Huang noted that the guidelines also emphasize standards for listing and delisting crypto assets, including requirements for fair trading practices and safeguards against market manipulation.
Custody and Record-Keeping Requirements
One of the core provisions under the upcoming framework mandates that VASPs maintain strict controls over client assets. Specifically, cryptocurrency custodians will need to store client assets separately from their own, ideally placing them in a trust to protect customers. Additionally, custodians will be required to obtain an annual audit from a certified public accountant, a measure aimed at ensuring consistent oversight of assets held on behalf of clients.
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Notably, the FSC is also drafting a specialized law dedicated to cryptocurrency regulation. Jin-Lung Peng, the FSC chair, confirmed at the conference that the proposal is expected to reach Taiwan’s Executive Yuan, the country’s highest administrative body, by June 2025. This law is intended to clarify the regulatory structure around digital assets, providing the industry with a more stable framework while also addressing evolving challenges in the space.
Industry Collaboration on Self-Supervision
Ahead of the new regulations, Taiwan’s local crypto industry has been proactive in forming an industry association to support self-supervision, adhering to government-recommended best practices. Established in June, this association aims to create self-regulatory standards that align with the forthcoming FSC guidelines, ensuring industry readiness and smoother implementation of the new rules.
Taiwan’s approach reflects a trend seen across global financial hubs, where regulatory bodies are increasing scrutiny over digital assets to foster stability and investor protection. In September, the FSC allowed professional investors to access bitcoin exchange-traded funds (ETFs) via a re-entrustment method.
