- On October 25th, legislators of Taiwan introduced the Virtual Asset Management Bill to parliament.
- The new legislation aims to enhance protection for customers and regulate the virtual asset industry.
- The 30-page bill imposes obligations on virtual asset service providers (VASPs), such as segregating customer funds from company reserves.
On October 25th, Taiwanese legislators introduced the Virtual Asset Management Bill to parliament. The new legislation aims to provide enhanced protection for customers and properly regulate the virtual asset industry.
The 30-page bill puts forward some common-sense obligations for virtual asset service providers (VASPs), including segregating customer funds from company reserves, establishing internal controls and audits, and joining the local trade association.
At this time, it does not require stablecoin issuers to hold 1:1 reserves or address algorithmic stablecoins. Rules around advertising and marketing activities would be set by regulators.
New virtual asset legislation outlines fines for operating without a license
Under the bill, VASPs operating without a license could face fines of 2 to 20 million Taiwanese dollars (approximately $60,000 to $600,000 USD). Companies already operating in Taiwan would have six months to obtain licensing once the law takes effect.
The bill comes after Taiwan’s Financial Supervisory Commission released industry guidelines in September prohibiting foreign VASPs from providing services in Taiwan without approval.
Major Taiwanese crypto exchanges have also formed a self-regulatory association called the Taiwan Virtual Asset Platform and Transaction Business Association. The group of seven exchanges, including MaiCoin and BitstreetX, aims to support the industry and cooperate with regulators.