Taiwan to Tighten Rules for Crypto Exchanges with a Focus on Listing and Asset Management
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Loading... - Kaito Daigo
- 07 Nov 2024
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The Taiwan Financial Supervisory Commission (FSC) is poised to implement new regulations for cryptocurrency service providers, set to take effect in January 2025. These regulations will require all virtual asset service providers to register in compliance with Anti-Money Laundering (AML) requirements, with a particular emphasis on the processes for listing and delisting crypto assets.
According to reports from The Block, the FSC's new rules will mandate that non-compliance could result in criminal penalties, including potential prison sentences of up to two years. While the announcement of these regulations was made in October, specific details regarding the requirements for crypto exchanges have only recently been revealed.
The upcoming regulations will tighten controls in several critical areas, including:
- Fiat Currency Storage: Enhanced requirements for how cryptocurrency exchanges manage and store fiat currencies.
- Information Security: Stricter protocols to safeguard user data and transaction information.
- Customer Complaint Handling: Clear procedures for addressing and resolving customer complaints.
- Record-Keeping: Comprehensive documentation practices to ensure transparency and accountability.
- Disclosure Practices: Requirements for exchanges to provide clear and accurate information to users.
Additionally, cryptocurrency trading platforms will be required to establish transparent procedures for the listing and delisting of crypto assets. They must also implement measures to prevent fraudulent trading activities.
The new regulations will also impose requirements on custodians, mandating that they place client assets in a trust or separate them from the trading platforms' own assets. This measure aims to enhance the security of client funds and reduce the risk of misappropriation.
Taiwan's approach to cryptocurrency regulation has been evolving rapidly. In 2021, the FSC mandated that exchanges and crypto trading platforms adhere to AML and Know Your Customer (KYC) rules. By 2023, the regulatory framework was further strengthened, requiring exchanges to provide more detailed information regarding their trading operations and reporting practices.
The FSC is also exploring the possibility of classifying crypto exchanges as financial institutions, which would impose higher standards for security and reporting. Earlier this year, Taiwan's Ministry of Justice proposed stringent anti-money laundering rules aimed at combating fraud among virtual asset service providers.
As Taiwan prepares to implement these new regulations, the focus on compliance, security, and transparency reflects a broader trend in the global cryptocurrency landscape. By tightening rules for crypto exchanges, Taiwan aims to foster a safer trading environment while addressing concerns related to fraud and money laundering in the rapidly evolving digital asset market.
