Taiwan launches Crypto Association to improve industry self-regulation

Taiwan has taken a step towards regulating the cryptocurrency industry by officially establishing the Taiwan Virtual Asset Service Provider Association.

A total of 24 crypto firms have joined the association, all registered with the Financial Supervisory Commission (FSC) for anti-money laundering (AML) compliance. This newly formed body is set to play a crucial role in the development and supervision of the cryptocurrency industry within the country.

The association will be chaired by Titan Cheng, founder and CEO of BitoPro, one of the leading cryptocurrency exchanges in Taiwan. Winston Hsiao, co-founder and chief revenue officer of XREX, will serve as vice president. The main task of the association is to create self-regulatory guidelines to ensure the correct functioning of the sector and alignment with government standards.

Role of the Financial Supervision Commission

The FSC tasked the new association with developing self-monitoring rules. The commission highlights the importance of the growth of the virtual asset sector and its connection to Taiwan’s broader social and economic development. Hsiho Huang, director of the FSC’s securities firm division, said:

“The FSC attaches great importance to the development of the virtual asset industry. We believe that the healthy development of this sector is closely related to the development of society and the economy.”

As of July 2021, the FSC has necessary cryptocurrency service providers to adhere to anti-money laundering laws. This regulation aims to ensure that the sector operates in a transparent and secure manner, protecting against financial crimes.

Purposes and responsibilities of the Association

The main objective of the Taiwan Virtual Asset Service Provider Association is to formulate self-regulatory guidelines. These guidelines will focus on the classification and rating management of virtual asset service providers (VASPs). The association aims to balance the growth of the industry with the need to meet government expectations and protect consumer rights.

The association said the self-regulatory guidelines will respond to both industry interests and government requirements. This initiative is expected to create a more structured and trustworthy environment for cryptocurrency businesses in Taiwan.

In addition to establishing the association, Taiwan’s Ministry of Justice has proposed changes to the existing one Anti-money laundering laws. These changes would require domestic and foreign cryptocurrency companies wishing to operate in Taiwan to register for AML compliance. Failure to comply with these rules could result in imprisonment of up to two years.

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