Regulation
Taiwan officially launches crypto defense agency
The crypto protection body of Taiwan officially begins its activities with twenty-four members. The structure will serve as a link between the private sector and the government for the supervision of the sector. Let’s see all the details below.
A bridge between private sector and government for crypto in Taiwan
As expected, the Taiwan Virtual Asset Service Provider Association, Taiwan’s cryptocurrency advocacy body, was officially established in an inaugural meeting with 24 cryptocurrency industry entities.
This according to a announcement on X and a blog post from the blockchain company XREX. The association aims to serve as a link between the private sector and government for oversight of the cryptocurrency industry.
Its first objective will be to develop a self-regulatory code which covers industry classification, listing and delisting, consumer protection, risk control, transaction monitoring and advertising, as discussed in the blog post.
Preparations for the creation of the association began in September, when nine entities came together to start the process.
Taiwan’s Ministry of the Interior approved the establishment of the body according to law in March 2024, and the founding meeting was held on Thursday.
Titan Cheng, founder and CEO of BitoPro, will be its president, while Winston HsiaoChief Revenue Officer of XREX, will be the vice president.
Taiwan has taken steps to introduce legislation to regulate the cryptocurrency sector after the FTX This scandal forced him to reconsider his previously relatively selfless position.
Taiwan: the bill on cryptocurrencies in the Legislative Yuan
The Taiwan Virtual Asset Management Bill aims to define digital assets, establish operational standards for asset operators, and ensure consumer protection.
In addition, it aims to require registration of industrial associations and regulatory approvals.
So far, the country has taken a fairly relaxed approach to the sector, regulating only based on existing customer identification and anti-money laundering laws.
The regulatory process accelerated after the collapse of cryptocurrency exchange FTX last November, due to its popularity among Taiwanese for favorable U.S. dollar interest rates compared to local banks.
Unlike the regulations on cryptocurrencies in Hong Kongthe bill does not decisively address derivatives or stable part.
However, he recognizes that derivatives linked to virtual assets have unique characteristics (he mentions perpetual contracts in particular) which could require specific regulation in the future, outside of traditional regulations. normative financial.
Additionally, the bill does not limit digital asset trading to professional investors.
Formal regulatory oversight
Unlike Japan, which requires the mandatory use of custodians for locally licensed exchanges, here it only requires the separation of client assets from company funds, without requiring the explicit use of third-party custodians.
Stock exchange operators will be required to submit periodic reports to auditors on their activities and managed assets.
Enabling regulatory authorities such as the Financial Supervisory Commission (FSC) to carry out regular inspections of their internal control and audit systems.
Even though the current bill does not explicitly mention Proof of reservations, it says the regulator will set the asset reporting standards, after consultation with the industry, in the hope that authorized exchanges will adhere to them.
Interested parties in Taiwan’s cryptocurrency industry have expressed positive reception towards this formal regulatory oversight.