Taiwan Unleashes Sweeping Crypto Law With 7-Year Prison Terms for Rule Breakers

Strict Licensing and Operational Requirements

Taiwan’s Legislature connected June 30 approved the Virtual Asset Service Act, establishing the island’s archetypal dedicated cryptocurrency instrumentality and designating the Financial Supervisory Commission (FSC) arsenic the sole regulator. According to reports, the 56‑article statute replaces an anti‑money‑laundering registration strategy with mandatory licensing for each virtual plus work providers.

Under the regime, exchanges, custodians and wallet operators indispensable get FSC support and conscionable requirements for internal controls, cybersecurity and concern continuity. Providers indispensable unafraid abstracted licenses crossed 7 categories — exchange, trading platform, transfer, custody, underwriting, lending and others — ending the signifier of offering aggregate services nether a azygous registration. The rules are expected to instrumentality effect by aboriginal 2027.

Eight incumbents who antecedently completed anti-money laundering (AML) registration volition person 12 months to use for licenses and 21 months to get certification erstwhile the instrumentality takes effect, with a imaginable three‑month extension.

The enactment besides creates Taiwan’s archetypal stablecoin framework. Domestic issuance is constricted to banks, and tokens indispensable beryllium pegged solely to fiat currencies. In addition, issuers indispensable support afloat one‑to‑one reserves segregated from institution funds and placed successful spot with home fiscal institutions.

Foreign-issued stablecoins specified arsenic USDT and USDC volition beryllium treated arsenic regulated commodities and volition necessitate FSC support for listing connected licensed exchanges. Operating a virtual plus work supplier (VASPs) oregon issuing stablecoins without authorization is punishable by up to 7 years successful situation and fines of up to $3.1 cardinal (NT$100 million).

The FSC indispensable draught astir 9 pieces of secondary authorities by aboriginal 2027. The Virtual Asset Service Provider Association said it would assistance firms done implementing rules covering establishment, unit management, interior controls, abnormal‑transaction monitoring, outsourcing and financial‑statement preparation. It volition besides run committees for listing review, subject and fraud‑prevention compliance.

Lawmakers besides adopted a nonbinding solution requesting the FSC to submit, wrong 1 year, a program to let licensed firms to connection cryptocurrency derivatives.