Taiwan Takes First Step Towards Regulating Crypto with New Bill

Summary

• ​​Taiwan's draft crypto act has passed its first reading in the Legislative Yuan, signaling a step towards regulating the crypto industry.
• The proposed law mandates all crypto platforms in Taiwan to apply for permits, aiming to enhance accountability and oversight, and grants regulatory authorities the power to impose penalties for rule violations.

Taiwan’s Crypto Bill Passes First Reading

Taiwan has taken a significant step towards regulating the crypto industry as its draft crypto act passed its first reading at the Legislative Yuan, the country's parliament. 

The proposed special law, initiated by Chiang and 16 other lawmakers, mandates all crypto platforms operating in Taiwan to apply for a permit. Failure to do so may result in regulators ordering them to cease operations. This move is aimed at ensuring a higher degree of accountability and oversight within the crypto sector.

Yung-Chang Chiang, a member of the Legislative Yuan who jointly proposed the special act, stated:

"After the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage."

This development signals progress in the nation's efforts to establish a regulatory framework for the crypto industry.

While Taiwan's Financial Supervisory Commission (FSC) had previously issued guidelines for self-regulation by the crypto industry, these lacked legal enforceability. Under the new special law, regulatory authorities would have the power to impose administrative penalties on operators who violate self-regulation rules. 

The second reading of the bill is yet to be scheduled, but it is expected to continue progressing, although it may not occur until after January 2024. As the Taiwanese government takes strides towards cryptocurrency regulation, the industry in the nation is set to undergo significant changes. Currently, the country mandates virtual asset service providers to adhere to anti-money laundering laws, and this new development is poised to bring about a more structured and regulated crypto environment.