Chairman of the Financial Supervisory Commission (FSC), Thomas Huang, will present a special report to the Legislative Yuan’s Finance Committee tomorrow regarding the “Draft Amendments to the Anti-Money Laundering Act and the Establishment of the Prevention of Fraudulent Crimes Act to Prevent Virtual Assets and Virtual Asset Service Providers (VASPs) from Becoming Tools for Fraud” and the “Process of Establishing Special Laws for Virtual Assets.”
According to a report by the China Times News website, the FSC stated in a written report submitted to the Finance Committee today that in order to achieve the regulatory goal of ensuring security and development go hand in hand, the FSC will actively promote the regulation of virtual asset operators through special laws while promoting the healthy development of the industry. Additionally, the FSC acknowledged in the report that virtual assets are an emerging technology industry with future development potential, and will actively guide operators to promote industry development.
The FSC outlined that the regulation of virtual assets in Taiwan will be carried out in four phases. The country has already entered the third phase, with the fourth phase set to push for the “Virtual Assets Act” and is expected to submit the draft by the end of this year, and review it with the Executive Yuan by June next year.
The four phases of regulating virtual assets in Taiwan are as follows:
– The first phase involves the issuance of the “Prevention of Money Laundering and Anti-Terrorist Financing Measures for Virtual Currency Platforms and Trading Businesses” (VASP AML Measures), with 25 operators having completed regulatory compliance declarations so far.
– The second phase includes promoting the establishment of a VASP industry association and formulating self-regulatory norms. The VASP industry association is expected to hold its inaugural meeting on the 13th, and the FSC will actively supervise the association to establish self-regulatory norms and impose penalties to strengthen self-regulation.
– The third phase is to enhance management by amending the Anti-Money Laundering Act to include VASP registration requirements, clarify VASP definitions, and impose criminal liability on illegal operators. Differentiated management will be implemented in subsidiary regulations based on the complexity of operations.
– The fourth phase will focus on promoting the “Virtual Assets Act” to effectively regulate market behavior. The FSC has outsourced a research team to reference regulations or suggestions from the EU, Japan, South Korea, Hong Kong, the UK, the Financial Action Task Force (FATF), and the International Organization of Securities Commissions (IOSCO) in drafting the special law. The FSC plans to propose the draft text of the Virtual Assets Management Act by the end of December this year, conduct regulatory announcements and hold public hearings, adjust and amend based on external feedback, and submit the special law draft for review by the legislature before June next year.
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