Taiwan has taken a major step forward in regulating its burgeoning cryptocurrency sector by creating a new industry association. Established under the guidance of the Financial Supervisory Commission (FSC), the Taiwan Virtual Asset Service Providers Association aims to enhance oversight and promote self-regulation within the industry. This marks a pivotal moment in the country’s approach to cryptocurrency regulation.
Who Are the Key Players?
The association comprises 24 cryptocurrency companies, all registered with the FSC for anti-money laundering (AML) compliance. Titan Cheng, the founder and CEO of BitoPro, Taiwan’s prominent cryptocurrency exchange, has been appointed as chairman. Winston Hsiao, co-founder and chief revenue officer of XREX, will act as vice-chairman. This composition signifies the government’s seriousness in curbing illicit activities in the cryptocurrency space.
The formation of this association is a strategic move for Taiwan to monitor cryptocurrency trading companies more closely. The FSC has delegated the association to formulate self-regulation guidelines that member companies must adhere to, ensuring the industry’s integrity aligns with governmental standards.
What Guidelines Will Be Created?
A primary responsibility of the association is the development of self-regulating guidelines aimed at classification and rating management for Virtual Asset Service Providers (VASPs). These guidelines are designed to foster sector growth while adhering to regulatory standards and safeguarding consumer rights and interests.
Hsiho Huang, director of the securities firms division at the FSC, highlighted the significance of the virtual asset industry for Taiwan’s social and economic landscape. At the launch event, Huang reaffirmed the FSC’s commitment to nurturing a healthy cryptocurrency ecosystem that benefits both the public and the industry.
Concrete Implications for Stakeholders
Key inferences for stakeholders include:
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Mandatory AML registration for all cryptocurrency companies in Taiwan.
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Development of self-regulation guidelines by the new association.
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Potential penalties, including imprisonment, for non-compliance with AML laws.
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Increased governmental oversight encouraging a more secure and legitimate trading environment.
Last month, the Taiwan Ministry of Justice proposed amendments to existing AML laws. These changes require both domestic and international cryptocurrency firms to register for AML compliance if they wish to operate in Taiwan. Non-compliance may result in severe penalties, including imprisonment for up to two years.
