Taiwan's Financial Supervisory Commission (FSC) has introduced a set of stringent rules, effectively banning unregistered foreign cryptocurrency exchanges from operating within the country. This action occurs as part of Taiwan's commitment to enhancing investor protection and promoting responsible practices within the crypto industry.

The FSC has outlined key measures to regulate the cryptocurrency market within its borders. These guidelines, released on September 26, specifically target virtual asset service providers (VASPs) operating in Taiwan. The rules include industry-standard practices such as segregating the exchange's treasury assets from customer assets and establishing mechanisms for listing and delisting crypto assets.

Notably, the FSC has imposed strict restrictions on foreign VASPs, preventing them from offering their services in Taiwan unless they have received the necessary approval and registration from the regulatory authorities.

"Overseas virtual asset platform operators are not allowed to solicit business within the territory of my country or from Chinese citizens unless they have been registered in accordance with the Company Law, submitted to the Financial Supervisory Commission and completed a declaration of compliance with money laundering prevention laws," the FSC stated.

Taiwan Forges a Path to Crypto Regulation

In addition to regulatory oversight, the FSC has urged VASPs to engage in self-regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term within the cryptocurrency industry. Relevant VASP associations are expected to formulate self-regulatory norms based on the guiding principles set out by the authority.

"Platforms should implement customer protection regulations based on the principles of fairness and reasonableness, equality, reciprocity and good faith," the FSC added.

Besides that, Taiwanese lawmakers have proposed an amendment to the law to create a dedicated bureau within the FSC specifically for crypto-related matters. This proposal, if passed, will expand the FSC's regulatory capabilities to cover cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term, adding to its existing oversight of banking, securities, futures, insurance, and auditing.

FSC Joins Global Regulators

Taiwan's FSC is the latest authority to address the need for stricter regulations in the crypto sector. Drawing inspiration from similar measures introduced by the European Union, Japan, and South Korea, Taiwan aims to create a more secure environment for crypto investors and operators.

Last month, during a meeting with numerous domestic cryptocurrency service providers, the FSC revealed that Binance was in the process of seeking registration for AML compliance. Although Binance operates in Taiwan, it is not yet fully regulated by the local authorities. However, Binance has established a local entity known as Binance International Limited Taiwan Branch.

Binance has also taken proactive steps to collaborate with Taiwanese law enforcement agencies in the fight against cybercrime. In June, the exchange partnered with Taiwan's Criminal Investigation Bureau to share its expertise in addressing digital asset-related crimes with over 200 Taiwanese law enforcement officers.