Amid the ongoing global crypto regulatory revolution, Taiwan has proposed a special law to regulate digital assets. The proposed law will require all cryptocurrency platforms in Taiwan to apply for a license.
According to the official announcement, the draft of the Crypto Act had its first reading today, October 27, at Taiwan’s parliament, the Legislative Yuan.
Taiwan Moves To Establish A Crypto Assets Regulatory Framework
While the new act has already passed the first reading, the lawmakers have yet to set a date for the second. According to Yung-Change Chiang, a member of the parliament and a contributor to the proposed Special Act, the bill’s first reading has catalyzed the discussions on the regulatory framework for the digital assets industry.
Chiang called on Taiwan’s Financial Supervisory Commission (FSC) to submit their version of a draft crypto bill to the legislature. According to him, the bill submission will allow various sectors to unite further and be on the same page during the legislative process.
Meanwhile, recall that the FSC released guidelines for the self-supervision of the crypto industry in September. The guidelines would ensure that local firms separate customers’ assets from the company’s assets. This would protect consumers from losses associated with assets coming.
Also, the new guidelines establish standards for the listing and delisting of virtual assets on various cryptocurrency trading platforms.
Further, the FSC plans to implement and enforce the guidelines through a potential crypto industry association, a move Chaing condemned. In his latest statement, the lawmaker noted that such regulatory measures are legally unenforceable.
At the parliamentary hearing held earlier this month, Chaing shared details of the proposed special crypto law.
He said:
[…] under the authority of this special law, regulatory authorities can impose administrative penalties on operators who violate these self-regulation rules. Without such a special law, the regulators would be unable to impose penalties.
More Info On The Proposed Special Crypto Law
The special crypto act is a product of a joint effort by Chaing and 16 other lawmakers. This law will mandate all digital assets platforms in Taiwan to apply for operational permits. Failure to do so will attract penalties, including a cease and desist order from regulators.
The parliament has not set a specific timeline for the bill’s second reading. However, according to information from Chaing’s office, it may happen before the end of January 2024. The reason for this speculation is that the tenure for the current Taiwanese lawmakers ends in January 2024.
Taiwan has ordered all virtual assets services providers to observe anti-money laundering regulations following their introduction by the FSC.
The FSC introduced the anti-money laundering measures on June 30, 2021, to prevent the use of virtual assets in money laundering and terrorism financing. Besides these rules, the Taiwanese crypto industry has remained unregulated until the recent moves by the lawmakers.