Taiwan plans to restrict offshore crypto exchanges from operating onshore without proper compliance registration as part of its upcoming guiding principles for crypto firms, a government official confirmed with The Block today.
Taiwan’s Financial Supervisory Commission has drafted ten guiding principles for virtual asset services providers to develop their own self-regulatory rules, as first reported today by Taiwan’s semi-official Central News Agency.
In a Thursday call with The Block, an FSC official said the regulator plans to officially release the guiding principles by the end of this month.
These principles are expected to include strengthening information disclosure, requiring businesses to establish review standards for virtual asset listing and delisting, and ensuring the separation and custody of companies’ and customers’ assets, according to the official.
One key restriction would be to strictly prohibit the illegal solicitation of business by foreign crypto firms. The FSC plans to specify in the guiding principles that if foreign VASPs do not register in accordance with company law and declare their compliance with anti-money laundering regulations to the FSC, they are not allowed to solicit business within Taiwan or to domestic residents.
Binance seeking AML compliance registration
Taiwan has required VASPs to comply with anti-money laundering laws since the FSC introduced anti-money laundering rules in July 2021. Otherwise, the industry remains largely unregulated in the country.
The Block reported last month that Binance, the world’s largest crypto exchange, is applying to get registered in Taiwan for AML compliance.
While Binance is not regulated in Taiwan, the exchange has formed a local entity named “Binance International Limited Taiwan Branch (Seychelles),” according to the Department of Commerce’s database. The registration information showed that the government approved Binance’s company registration on May 12, 2023, with a registered capital of NT$30 million ($937,000) in Taiwan.
Last month, the Ministry of Economic Affairs announced that it has proposed adding a new business category in relevant regulations, which may enable cryptocurrency-related companies to establish industry associations. This move is aimed at fostering the development of self-regulatory guidelines.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.