A report featured on the Taiwanese local news outlet CNA revealed that the Eastern Asian country will restrict foreign exchange that violates the existing regulation. The Taiwan Financial Supervisory Commission (FSC) plans to impose new regulations on crypto assets.
In a recently drafted bill, the policymakers outlined ten fundamental principles for virtual asset service providers (VASPs). Under the draft bill, the Taiwan authority has outlined a detailed report on enhancing information disclosure.
Taiwan New Crypto Regulations
The new provision will mandate the VASP to develop well-synthesized standards that will be used to review the listing and the delisting of assets. The Taiwanese authority will require the VASP to create a separate custody and platform asset category for retail and institutional clients.
The proposed regulation will mandate the token issuers and exchanges to implement measures addressing money laundering.
In addition, the FSC plans to impose restrictive measures to address illegal business activities conducted by foreign VASPs in the region. To ensure the foreign VASP operates compliantly, the market regulators will prevent unregistered overseas companies from conducting business in Taiwan.
Beyond this, the FSC will ensure that the foreign VASP meets the global anti-money laundering (AML) requirements. Guided by the existing international practices, the FSC plans to amend its regulations in the coming days. However, plans to review the Taiwanese crypto regulations will begin in September.
Measures to Curb Illegal Financial Activities
Earlier, the FSC chairperson Huang Tien-mu told the local newsroom United News Agency that the new regulations task the agency to become the primary regulator for cryptos. Notably the FSC has been authorized by Taiwan’s highest administrative body executive yuan to monitor crypto-related transactions and payments.
Its supervisory roles will not monitor activities conducted through non-fungible tokens (NFTs). Though after implementing the new rules, the Taiwan authority will task the Ministry of Digital Affairs to regulate the NFT activities.
The head of FSC underlined that the new regulations would separate customers’ assets from company funds. Also, the new regulatory framework will outline the required investors’ practices.
In August, the FSC urged investors to be hyper-vigilant when trading high-risk assets such as cryptos. The FSC outlined the risks associated with buying crypto assets through credit cards.
In a letter shared with the Taiwanese banking association, the financial regulators demanded that credit card providers operating as crypto payment providers comply with the new legislation within three months.
After the set timeframe, the FSC will consider the activities of crypto merchants illegal and will require the audit report to assess their operations. The FSC stressed that the use of credit cards to facilitate crypto payment could expose the country to debt and a high fiscal burden.
The ban on credit cards to purchase crypto assets aims to reduce illegal financial activities. The FSC will also prohibit using credit cards in online gambling and the purchase of conventional securities such as stock bonds and futures.