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On Oct 25, Taiwanese lawmakers introduced the Virtual Asset Management Bill in the Taiwan unicameral legislature, the Legislative Yuan. The bill introduces a regulatory framework to oversee the crypto industry in Taiwan. The 30-page bill, co-authored by 17 lawmakers, elaborates on how the crypto industry must operate within the country. The lawmakers believe that crypto assets are distinct from traditional financial products and warrant special regulations.The bill imposes obligations on Virtual Asset Service Providers (VASPs), such as the segregation of customer funds from the company’s reserve funds, implementation of an internal control and audit system, and membership in the local trade association.The bill has proposed fines for Virtual Asset Service Providers (VASPs) who operate without a licence. The minimum penalty is 2 million Taiwanese dollars (about $60,000), while the maximum fine is 20 million TWD ($600,000). Existing VASPs operating in Taiwan will have a six-month grace period from the effective date of the bill to secure their licences.Regarding crypto marketing activities, the advertising rules are left to be determined by the “competent authority.”The schedule for the second reading of the bill is yet to be finalised, and the Financial Supervisory Commission (FSC) is expected to provide its inputs on the draft bill before further progress.Yung-Chang Chiang, a member of the Legislative Yuan and co-author of the bill, expressed, “We hope that the Financial Supervisory Commission can also submit their version of a draft bill to the legislature, allowing various sectors of society to further consolidate consensus during the process.”The Taiwanese FSC had released guidelines for the crypto sector earlier in Sept 2023. It prohibited foreign VASPs from operating in Taiwan without obtaining necessary approvals from the regulator.The FSC released these guidelines in response to the formation of a self-regulatory association by significant crypto exchanges in Taiwan. The Taiwan Virtual Asset Platform and Transaction Business Association was formed in September 2023 by local exchanges such as MaiCoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito.The association’s formation was a positive sign of the maturing crypto industry in Taiwan. The Virtual Asset Management Bill will further assist in providing legal enforceability to these crypto businesses.
Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
