Taiwan’s FSC to heighten scrutiny of crypto listings on exchanges in upcoming January rules, official says

Taiwan’s financial watchdog is set to introduce new criteria, covering crypto asset listing and record keeping, as part of its upcoming “registration regulation” set to be enacted in January 2025.

Hsi-Ho Huang, director of the securities firms division of the Taiwan Financial Supervisory Commission, said on Monday at the FinTechOn conference in Taipei that the FSC will require “virtual asset service providers” to complete compliance registration with new rules set to take effect in January 2025. Non-compliance may lead to criminal penalties, including imprisonment for up to two years.

Taiwan currently requires VASPs to comply with anti-money laundering laws based on the FSC’s rules introduced in July 2021, which the new rules will soon replace. While the FSC — appointed as the main authority to oversee the crypto sector in March last year — announced these rules in October, Huang today spelled out more details on the forthcoming requirements and the regulatory approach behind them.

With the new rules in place soon, the regulator aims to tighten scrutiny on key areas, including custody of fiat currency, information security, customer complaint handling procedures, record keeping and information disclosure, according to Huang.

Huang noted that crypto trading platforms must establish clear procedures for listing and delisting crypto assets, and take measures to prevent unfair trading and detect abnormal price and volume.

The regulator will also require crypto custodians to place client assets in trust or segregate them from the trading platforms’ proprietary assets. Custodians must also commission a CPA to issue reports annually for client assets.

In addition to introducing the new rules on compliance registration, the FSC is also drafting a special law proposal specifically for crypto assets. Jin-Lung Peng, chair of the FSC, said today at the forum that the regulator is making progress and plans to submit the law proposal to the Executive Yuan, Taiwan’s highest administrative organ, in June 2025.

In June this year, the local crypto sector established an industry association to formulate self-supervisory rules under the government’s guidelines.