Chairman of the Financial Supervisory Commission, Thomas Huang, will visit the Legislative Yuan’s Finance Committee tomorrow to provide a special report on the “Draft Amendments to the Anti-Money Laundering Act and the Establishment of the Prevention of Fraudulent Crimes Act to Prevent Virtual Assets and Virtual Asset Service Providers (VASPs) from Becoming Tools for Fraud” and the “Process of Establishing Special Laws for Virtual Assets.”
According to the report by the China Times News website, the Financial Supervisory Commission stated in a written report submitted to the Finance Committee today that in order to implement the regulatory goal of achieving both security and development, the Commission will actively promote special laws to regulate virtual asset operators and promote the healthy development of the industry. Additionally, the Commission acknowledged in the report that virtual assets are an emerging technology industry with future development potential, and will actively guide operators to promote industry development.
The Commission outlined that the regulation of virtual assets in Taiwan will be conducted in four phases, with the country currently in the third phase. The fourth phase will involve the promotion of the “Virtual Asset Special Law,” which is expected to be submitted as a draft by the end of this year and sent to the Executive Yuan for review in June next year.
The four stages of regulating virtual assets by the Commission are as follows:
– The first stage involves the issuance of the “Prevention of Money Laundering and Counter-Terrorist Financing Measures for Virtual Currency Platforms and VASP Businesses,” with 25 operators having completed compliance statements so far.
– The second stage includes the promotion of the establishment of the VASP Industry Association and the formulation of self-regulatory rules. The VASP Industry Association is scheduled to hold its inaugural meeting on the 13th, with the Commission actively supervising the association to establish self-regulatory rules and penalties to strengthen compliance.
– The third stage involves amending the Anti-Money Laundering Act to include VASP registration requirements, clarify VASP definitions, and impose criminal liability on illegal operators to enhance management. Differential management based on the complexity of operations will be considered in subsidiary regulations.
– The fourth stage will focus on promoting the “Virtual Asset Special Law” to effectively regulate market behavior. The Commission has commissioned a research team to reference regulations or recommendations from the EU, Japan, South Korea, Hong Kong, the UK, the Financial Action Task Force (FATF), and the International Organization of Securities Commissions (IOSCO) in drafting the special law. The Commission aims to propose the draft of the Virtual Asset Management Special Law by the end of December, conduct regulatory announcements and hold public hearings, adjust and revise based on external feedback, and submit the draft special law for review by the Yuan before June next year.