Taiwan to Ban All Offshore Exchanges on Failure of Compliance

Taiwan to Ban All Offshore Exchanges on Failure of Compliance

Taiwan is preparing to introduce some sweeping regulatory changes while restricting offshore exchanges from operating in the country without any proper compliance in place.

The Financial Supervisory Commission (FSC) of Taiwan has formulated ten guiding principles for virtual asset service providers to establish their own self-regulatory frameworks. Taiwan’s semi-official Central News Agency was the first to report regarding the development.

An FSC official also stated that the government is planning to release the guiding principles for the crypto exchanges by the end of this month. These principles will include strengthening information disclosure and requiring businesses to establish review standards for crypto listing and delisting. Furthermore, these principles will ensure the separation and custody of companies’ and customers’ assets.

A significant limitation will include a strict prohibition on the unlawful solicitation of business by foreign cryptocurrency companies. The Financial Supervisory Commission (FSC) intends to outline in the guiding principles that foreign Virtual Asset Service Providers (VASPs) must not engage in business solicitation within Taiwan or to domestic residents unless they register in compliance with company law and declare their adherence to anti-money laundering regulations to the FSC.

Binance and Bitfinex Seek AML Compliance

On the morning of September 7, Democratic Progressive Party legislator Guo Guowen convened a public hearing focused on “Virtual Asset Supervision”. The gathering aimed to bring together key players from the local Taiwanese industry to deliberate on the “Financial Supervisory Commission Guiding Principles”, scheduled for release at the end of September. Notable participants from the international industry included representatives from major entities like “Binance” and “Bitfinex”, a sister exchange of Tether.

Taiwan has mandated that Virtual Asset Service Providers (VASPs) adhere to anti-money laundering regulations since the Financial Supervisory Commission (FSC) introduced these rules in July 2021. Beyond these AML requirements, the cryptocurrency industry in Taiwan has largely operated without significant regulatory oversight.

Binance, the world’s largest cryptocurrency exchange, is in the process of seeking registration in Taiwan to ensure compliance with anti-money laundering regulations.

Although Binance operates without formal regulation in Taiwan, the exchange has established a local entity known as “Binance International Limited Taiwan Branch (Seychelles)”, as indicated in the Department of Commerce’s database. Registration records show that the Taiwanese government approved Binance‘s company registration on May 12, 2023, with a registered capital of NT$30 million ($937,000) in Taiwan.

In a related development, the Ministry of Economic Affairs announced last month that it is proposing the addition of a new business category within relevant regulations. This proposed change could facilitate the establishment of industry associations by cryptocurrency-related companies, a move intended to promote the development of self-regulatory guidelines in the sector.


Taiwan to Ban All Offshore Exchanges on Failure of Compliance

Source link