- Offshore exchanges need to register with Taiwan’s financial regulator in order to operate in the country.
- Local crypto exchanges also need to take stringent measures in the light of these guidelines.
Taiwan recently published the latest set of guidelines for crypto platforms to protect the interests of customers.
As per these guidelines, local crypto platforms must maintain the separation and custody of company’s and customers’ assets. Crypto platforms must establish review standards for listing and delisting crypto assets.
The guidelines propose mandatory insurance against user losses. In addition, firms must also improve information disclosure.
As far as offshore exchanges are concerned, they would need to register with the financial regulator in order to operate in Taiwan. Furthermore, exchanges and firms will need to declare compliance with anti-money laundering and counter-financing of terrorism laws.
The FSC also managed to focus on the establishment of systems for continued operations, information security, and the management of private keys in hot and cold wallets. Internal control and audit systems are also a part of the regulatory framework.
The country’s regulator, the Financial Supervisory Commission (FSC), issued these guidelines on 26 September.
Additionally, the guidelines forbid any crypto platform from engaging in operations involving derivative financial product transactions with crypto assets as underlying assets or crypto asset businesses with security-like features.
They also propose a ban on stablecoins pegged to the Taiwanese dollar. The proposal aims to stabilize the country’s financial system and protect consumers from being misled by false advertising.
Taiwan follows suit after EU and other economies issue crypto frameworks
The FSC referred to new crypto regulations from the European Union, Japan, and South Korea in formulating its own crypto guidelines. It was only in March that Taiwan appointed the FSC as the chief regulator of the crypto sector in the country.
Nine major crypto firms in Taiwan instantly came together to form a working group as the FSC released these guidelines. These firms wish to establish a national crypto industry association. They aim to file their application for an association in October.
These quick developments point towards a new era for the crypto sector in Taiwan.