Key Points:
- Taiwan’s FSC enhances cryptocurrency oversight with new VASP guidelines.
- Regulations prioritize environmental transparency and consumer protection.
- FSC encourages VASP sector self-regulation and mindful trading.
Taiwan is steadily paving its path in the rapidly expanding universe of cryptocurrencies. Taiwan’s Financial Supervisory Commission (FSC) has recently unveiled an exhaustive set of regulations tailored for virtual asset service providers (VASPs). Launched in March, these norms testify to Taiwan’s progressive approach toward evolving digital financial markets. They follow the foundational anti-money laundering (AML) and counter-terrorism financing (CTF) regulations introduced by the FSC in mid-2021.
Key Components of VASP Management Directives
A glimpse into the essential components of these newly minted guidelines reveals:
- Environmental Responsibility for Cryptocurrency Issuers: It is now imperative for issuers of any virtual assets to make public a detailed whitepaper on their official sites, shedding light on vital aspects, notably the environmental repercussions of the particular asset. Such whitepapers should be effortlessly accessible to the general populace.
- Structured Review for Asset Listing: Platforms have been directed to craft meticulous criteria and processes for examining the contents of whitepapers. They must also decide which virtual assets to feature or remove, integrating these standards into their intrinsic oversight systems.
- Clear Distinction of Assets: To enhance consumer assets’ protection, platforms must draw a clear line between their funds and customer deposits, spanning tangible and digital assets.
- Fair and Transparent Trading: Platforms have been handed the responsibility to design, formulate, and publicly share policies governing digital asset trading, thereby ensuring a just and transparent market landscape.
- Ethical Business Operations: Platforms must prioritize fairness, equality, and customer protection, guiding their operations with these principles in mind.
- Robust System and Wallet Security: Platforms must fortify their operational systems, ensuring customer keys remain impenetrable.
- Complete Information Accessibility: The onus is on platforms to be transparent regarding any affairs related to the introduction, listing, removal, and protection of virtual assets.
- Enhanced Internal Oversight: Platforms should put concrete internal monitoring and evaluation mechanisms in place, readying themselves for potential in-person inspections by FSC or its designated agencies.
- Regulations for Individual Exchangers: Sole traders in the virtual asset realm should publicly vouch for their adherence to AML regulations, ensuring their declarations are on par with corporate pledges.
- Overseas Currency Exchangers: Foreign-based digital asset platforms eager to venture into the Taiwanese market must register as per local corporate laws and affirm their commitment to AML norms. Direct or indirect solicitation to Taiwanese clientele without authorization is a strict no-no.
The FSC, upon announcing these regulations, expressed its hope for the VASP sector to champion self-regulation. They expect industry conglomerates to conceptualize standards in sync with the guidelines to intensify internal supervision, ultimately benefitting consumers.
Conclusion
Given the recent scandals involving foreign digital asset platforms and the unpredictable nature of cryptocurrencies, the FSC urges the Taiwanese populace to tread cautiously in the cryptocurrency market, ensuring a thorough evaluation of potential risks.
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