Taiwan’s Financial Watchdog Cranks Up Crypto Exchange Oversight
Taiwan’s Financial Supervisory Commission will impose a new registration requirement on crypto exchanges beginning Nov. 30, as the regulator presses ahead with its plans to regulate the fast-growing business. The decision shows Taiwan’s intention to put more stringent oversight in place against the crypto industry, with an emphasis on compliance and consumer protection.
New Registration Requirement for Crypto Exchanges
According to reports on Sunday from Taiwanese news outlet Anue Juheng, all crypto exchanges operating in Taiwan will fall under the FSC’s new registration regime. The move appears to be one of regularization so that businesses can operate within the country’s regulatory paradigm to provide added transparency to the market. Comments by FSC chairman Peng Chin-long stated that so far, 26 exchanges have filed declarations of compliance with Taiwan’s AML laws and another 20 to 30 applications are in the process.
Strengthening of Inspections to Fill in Compliance Gaps
It also plans to strengthen inspections with a view to discovering and curing compliance gaps. Six exchanges will be inspected in November and December, following an audit of four major exchanges this summer that revealed significant compliance issues concerning customer identity verification and transaction monitoring.
Formulation of Special Law to Enforce Tightened Crypto Regulation
Taking yet another step in the direction of tightening up the regulations, it is preparing to draft a “Special Law for Crypto Exchange Management” that will go through public hearings from early 2025. This will likely cover exhaustive standards on matters such as licensing, protection of consumers, and operation manuals for crypto exchanges.
Meeting Evolving Challenges within the Digital Asset Landscape
Taiwan has been quite aggressive with crypto regulations, while its main challenge has been how to oversee this rapidly changing digital asset market and at the same time manage consumer protection. In October, the FSC introduced new AML proposals requiring crypto providers to submit annual risk assessments and implement tougher internal controls and audit mechanisms.
Taiwan’s experience can be indicative for other jurisdictions fighting their way through the complexities of cryptocurrency regulation in trying to balance innovation against security and oversight.
