As a seasoned crypto investor with roots deep in the digital asset landscape, I welcome Taiwan’s Financial Supervisory Commission’s (FSC) decision to introduce stricter regulations for crypto exchanges operating within its jurisdiction. My personal experiences have taught me that regulation brings stability and trust to any market, especially one as volatile and prone to manipulation as the cryptocurrency world.
The Financial Supervisory Commission (FSC) of Taiwan plans to implement fresh regulations for cryptocurrency exchanges operating under its purview. According to recent updates, Hsi-Ho Huang, head of the securities firms division at the FSC, stated that these new rules will be enforced starting from January 2025.
The rules will cause the commission to scrutinize cryptocurrency listings more closely on trading platforms, thereby enhancing the Financial Supervision Commission’s ability to regulate and monitor these very same platforms more effectively.
Starting in January, Taiwan will introduce a “registration regulation” that will establish particular standards for crypto exchanges and record-keeping on these platforms. At the FinTechOn conference in Taipei, Huang outlined the Financial Supervisory Commission’s revised compliance guidelines. According to this official, all “virtual asset service providers” (VASPs) operating within Taiwan will be subject to these new rules. Therefore, following the implementation of the regulation, VASPs must register for compliance.
It might be worth noting that the new rule is simply an upgrade to its recent AML rule, which the FSC implemented last month.
The regulatory body has additionally issued a caution concerning the potential consequences of disobedience. If digital platforms do not observe the fresh registration rules, there is a risk that these platforms and their leaders could be subjected to significant punishments, such as incarceration for a maximum period of two years.
Key Area of Focus for Taiwan’s New Crypto Rule
Under the proposed regulations, the Financial Supervisory Commission (FSC) appears to be focusing on several key aspects crucial for Taiwan’s development. These focus areas encompass safekeeping of fiat currencies, ensuring data security, managing customer grievances, maintaining records accurately, and making transparent disclosures of information to the public.
Given the information provided, the upcoming compliance regulations are geared towards promoting openness, safeguarding consumers, and ensuring ethical trade practices in every cryptocurrency exchange platform.
One crucial factor the new rule will emphasize significantly is ensuring crypto exchanges strictly adhere to detailed processes when adding or removing digital currencies from their offerings.
Furthermore, it’s crucial that these platforms have mechanisms to identify any unusual behavior. For instance, this could involve sudden price fluctuations or high trading volumes. The goal here is to safeguard against potential market manipulation.
To enhance security measures, the Financial Security Commission will mandate that crypto custodians keep their clients’ funds distinct from the company’s operational resources. These funds can either be placed in trust or separated to ensure client investments are safeguarded. Additionally, custodians should engage an independent Certified Public Accountant (CPA) to perform an annual review and issue a report on the clients’ assets.
Special Law Proposal in the Works
Additionally, it’s worth noting that the Financial Supervisory Commission (FSC) isn’t limiting its efforts to just compliance registration rules. They are also reportedly drafting a unique law aimed at governing cryptocurrencies. As per FSC Chair Jin-Lung Peng, this legislation has seen considerable advancement. However, their intention is to submit this proposal to the Executive Yuan, Taiwan’s highest administrative body, by June 2025.
In essence, Taiwan isn’t the only nation making strides in regulating cryptocurrencies. Across the globe, there’s an increasing focus on the crypto sector due to its vulnerability to risks and potential for manipulation.
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2024-11-04 12:00