Taiwan officially proposed a draft crypto act for first reading today.
A proposal to regulate crypto assets passed the first reading at the Legislative Yuan, Taiwan’s parliament, according to official records.
"After the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage," Yung-Chang Chiang, a member of the Legislative Yuan who jointly proposed the special act, told The Block. "We hope that the Financial Supervisory Commission can also submit their version of a draft bill to the legislature, allowing various sectors of society to further consolidate consensus during the process."
While Taiwan’s FSC last month released guidelines for the crypto sector to form its own self-supervisory rules through a potential industry association, such measures lack legal enforceability, the lawmaker said.
“In this case, under the authority of this special law, regulatory authorities can impose administrative penalties on operators who violate these self-regulation rules. Without such a special law, the regulators would lack the ability to impose penalties,” Chiang told The Block earlier this month at a parliament hearing.
Proposed special law
The special crypto law, proposed by Chiang and 16 other lawmakers, would require all crypto platforms operating in Taiwan to apply for a permit. If they failed to, regulators could order them to cease operations.
There is no specific timeline for the second reading of the bill, but it may not occur by the end of January 2024, according to Chiang's office. The current tenure of all lawmakers in Taiwan ends next January.
Currently, Taiwan has required virtual asset services providers to comply with anti-money laundering laws since the FSC introduced anti-money laundering rules in July 2021. Otherwise, the crypto industry remains largely unregulated.
© 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.