Taiwan legislators are diligently working towards presenting the country’s first crypto regulatory bill in November 2023, according to an exclusive interview granted to the Block’s Timmy Shen. The parliament member under the Yuan’s arm, Yung-Chang Chiang, emphasized the need for a special law to guide cryptocurrency trading and other activities in the country.
In the interview, Chiang highlighted the inherent differences between cryptocurrencies and traditional financial investment services, emphasizing the need for tailored and industry-specific guidelines. He also pointed out the underlying rationale for this initiative, expressing concern about the increasing challenges posed by various foreign crypto operations and the importance of Taiwan avoiding “regulatory arbitrage.”
“Having a special law protects investors and gives them value in the long run,”
– Yung-Chang Chiang
Despite the limited time frame, Chiang has been actively working towards achieving this goal. In an October 6 public hearing, he met with industry experts and service providers to discuss the upcoming draft bill.
In the meeting, Chiang focused on the proposed provisions by the Financial Supervisory Commission (FSC) guidelines regarding the interaction with cryptocurrencies. The FSC stated that all domestic crypto trading platforms must separate customers’ funds from the exchange’s treasury to prevent fraud. Additionally, they must review the listing and delisting standards for virtual assets and ensure easy access to required information by investors and government agencies.
“In this case, under the authority of this special law, regulatory authorities can impose administrative penalties on operators who violate these self-regulation rules. Without such a special law, regulators would lack the ability to impose penalties.”
In addition to domestic platforms, the guidelines also extend to foreign offshore platforms that wish to operate within the country. These international exchanges must complete registration before commencing their operations and must not operate without the necessary approvals from the FSC.
While the FSC’s efforts are commendable, Chiang believes that this approach lacks legal enforceability. According to him, the proposed special crypto law, which is expected to be submitted to the Parliament by November, will cover the gap and provide a more robust framework for regulating cryptocurrency exchanges in Taiwan.
Meanwhile, in a parallel development, nine crypto exchanges, including MaiCoin, BitoGroup, and ACE, are collaborating to create a crypto industry association aimed at advocating for the nascent industry. They are working towards officially applying for establishment by mid-October.