The Taiwanese legislature has passed a law establishing a comprehensive regulatory framework for the crypto industry. Key requirements include: VASPs must obtain a license from the Financial Supervisory Commission and comply with requirements for internal controls, cybersecurity, and business continuity. Existing providers with AML registration have 12 months to apply and 21 months to obtain a license.
Separate requirements have been introduced for stablecoins: full reserve backing, holding reserves in trust at Taiwanese financial institutions, regular audits, and a prohibition on paying interest to holders.
Illegal operation without a license carries a penalty of up to 7 years in prison and a fine of up to approximately $3.14 million. Fraud and price manipulation are punishable by 3 to 10 years in prison and a fine. Legislators also adopted a non-binding resolution calling on regulators to develop a plan for allowing crypto derivatives within one year.