- Taiwan’s regulator, the Financial Supervisory Commission (FSC), has issued new guidelines for virtual asset service providers (VASPs).
- The guidelines, published Tuesday, detail exchange registration, segregation of customer funds, disclosure requirements and bans on certain products.
Taiwan’s Financial Supervisory Commission has published a set of guidelines intended to clarify rules for cryptocurrency service providers and strengthen oversight of the local digital asset market. The measures are targeted at virtual asset service providers (VASPs) and set out operational, disclosure and compliance expectations designed to protect users and support a more transparent industry.
The FSC released the guidance in a report published on Tuesday, September 26, 2023. The development was widely shared on social media and highlighted by industry observers. The guidelines emphasize robust governance, clear investor protections and stricter controls for foreign platforms seeking to serve Taiwanese customers.
Registration requirement for foreign exchanges
Under the new rules, any offshore crypto exchange that intends to provide services to customers in Taiwan must register before offering products or solicitation. The FSC makes clear that overseas virtual asset operators may not market, solicit or do business in Taiwan unless they have completed the required company registrations, filed appropriate documentation with the Financial Supervisory Commission and made a declaration of compliance with Taiwan’s anti-money laundering regulations.
This registration requirement aims to ensure that foreign VASPs operate under the same basic legal and compliance expectations as domestic firms, improving accountability and creating legal clarity for cross-border service provision.
Operational controls and customer fund segregation
The guidelines require platforms to publish and implement formal processes for listing and delisting digital assets. Exchanges must separate customer assets from their own operational funds to prevent misuse and reduce counterparty risk. A security management system is required to protect user accounts, private keys and infrastructure from cyber threats and operational failures.
In addition, the FSC stresses internal controls, requiring platforms to disclose internal audit practices and other compliance procedures. These disclosures are intended to give customers and regulators visibility into how platforms manage risk, protect funds and ensure accurate record keeping.
Disclosure and external assurance
Platforms must improve transparency by providing clear, timely information about their operations. The FSC expects VASPs to disclose material information including governance arrangements, risk management processes and audit results. The guidelines also call for platforms to appoint qualified accountants or auditors to issue independent assessments of their operations where appropriate, strengthening public confidence in reported financial and operational statements.
Product restrictions and environmental considerations
The FSC’s guidance includes prohibitions and restrictions on certain products. Derivatives and security token offerings (STOs) are explicitly restricted, and stablecoins face specific regulatory scrutiny. The guidelines also indicate that issuers of crypto assets may be required to disclose relevant information about environmental impact and other material risks associated with their tokens.
By limiting high-risk products and requiring environmental and risk disclosures, the FSC aims to reduce systemic risk and protect retail investors from complex, opaque products that can carry significant volatility or counterparty exposure.
Self-regulation and industry standards
Recognizing the role of industry-led governance, the FSC allows VASPs to form or join self-regulatory organizations. These organizations can develop technical standards and codes of conduct to promote consistent practices across the sector. The goal is to encourage self-discipline and cooperation among market participants, while ensuring that industry standards align with regulatory objectives for consumer protection and market integrity.
Relevant VASP associations will be expected to define standards and norms that platforms should adopt to enhance customer protection and operational resilience. The FSC’s approach balances direct regulatory oversight with support for industry-driven best practices.
Objective and next steps
Overall, the FSC’s guidelines are designed to create a clearer, safer environment for crypto activity in Taiwan by setting baseline requirements for registration, fund segregation, disclosure, security and permissible products. The measures seek to protect customers, improve market transparency and ensure that both domestic and foreign VASPs adhere to consistent compliance standards.
As these guidelines take effect, market participants should review their policies, update operational controls and ensure any cross-border service offerings are aligned with Taiwan’s registration and anti-money laundering requirements. The FSC’s publication signals a continued focus on strengthening the regulatory framework for digital assets while enabling responsible industry development.