Taiwan Introduces Mandatory Licensing for Crypto Platforms

Taiwan Introduces Mandatory Licensing for Crypto Platforms

Authorities in Taiwan have implemented significant changes in the regulation of the cryptocurrency sector by introducing the 'Virtual Asset Services Act’, which mandates compulsory licensing. On June 30, 2023, the parliament approved the document in its third reading, after which it was sent for final approval to the country’s president.

Key Provisions of the New Law

The law introduces a new obligation for cryptocurrency exchanges and trading platform operators to obtain licenses from the Taiwan Financial Supervisory Commission (FSC). It’s worth noting that new rules require the segregation of client funds from company assets and strengthening cybersecurity measures and risk management.

Regulatory Regime for Stablecoins

Special attention is given to stablecoins. Issuing them requires approvals from both the FSC and the Central Bank of Taiwan. Also, full reserving of stablecoins is required — an important step to ensure their resilience and trust.

Transition Period for Business

For market participants registered under anti-money laundering (AML) standards, the law provides a 12-month transition period to apply for licensing and 21 months to obtain full FSC approval. This allows businesses to adapt to the new conditions.

Strict Sanctions for Non-compliance

The new laws come with strict penalties: individuals managing cryptocurrency platforms without a license may face imprisonment for up to seven years, and fines up to 100 million Taiwanese dollars (approximately $3.14 million). More severe measures are provided for fraud or market manipulation.

Conclusion

Taiwan’s legislative innovations demonstrate the authorities’ serious approach to structuring the cryptocurrency sector. Tightening regulation may create more transparent conditions for investors and increase administrative costs:

• Strengths: Increased trust in the market, reduced fraud cases.
• Risks: Possible business costs for compliance.
• Opportunities: Attraction of legitimate investors.
• Threats: Companies moving to less regulated jurisdictions.

Follow new insights in our telegram channel.

No need to invent complex schemes and look for the "grail". Use the Resonance platform tools.

Register via the link — get a bonus and start earning:
OKX | BingX | KuCoin.

Promo code TOPBLOG gives you a 10% discount on any Resonance tariff plan.