Taiwan announces the first batch of VASP Allowlist: 9 businesses achieve Compliance and are awarded, while 18 are blacklisted and permanently shut down.

Taiwan's virtual asset market has reached a significant turning point! On September 22, the Financial Supervisory Commission's Securities and Futures Bureau announced the first batch of virtual asset service providers (VASP) "Allowlist", with only 9 companies successfully obtaining legal identification, while as many as 18 companies were ordered to cease operations for failing to complete Money Laundering prevention registration. This announcement is not only an administrative procedure, but also symbolizes that Taiwan's encryption industry has officially bid farewell to the era of reckless growth and entered a new era of strict regulation. Investors need to immediately confirm whether their assets are stored on a legal platform to avoid potential risks.

9 Legal VASPs Emerge, Becoming the New Dominators of Taiwan's Encryption Market

According to Article 6 of the Money Laundering Prevention Act, the 9 virtual asset service providers approved by the Financial Supervisory Commission, sorted by stroke order, are:

· Hoya Digital Technology (HOYA BIT) - Unified Number: 90615871

· ZONE Wallet - Unified Number: 90266260

· Modern Wealth Technology (MaiCoin/MAX) - Unified Number: 54687323

· Weight Technology (KryptoGO Transfer) - Unified Number: 42996154

· Fu Sheng Digital (TWEX) - Unified Number: 90115398

· Cross-chain technology (Chainss, Atrix) - Unified number: 94197836

· BitoPro Technology - Unified Number: 90577481

· HzBit - Unified Number: 90127893

· XREX - Unified Number: 50897641

These 9 operators not only all joined the VASP association, but 7 of them are classified as Class A compliant operators, representing that their compliance level has reached the highest standard. For investors, these platforms provide a relatively safe trading environment and asset protection.

18 businesses have been removed and are prohibited from operating from today

On the other hand, the Financial Supervisory Commission also announced a list of 18 operators that have been prohibited from operating due to incomplete registration, including:

· Yilu Fa Co., Ltd. (Unified Number: 90341182)

· San Chuan Tong Zheng Co., Ltd. (Unified Number: 90607767)

· Yin Tian Xia International Management Consulting Co., Ltd. (Unified Number: 90193197)

· Ace Digital Innovation Co., Ltd. (Unified Number: 50778671)

· Yangjia Co., Ltd. (Unified Number: 90665196)

· Taiwan Zhiqing Co., Ltd. (Unified Business Number: 82968751)

· Asia-Pacific Eant Technology Co., Ltd. (Unified Number: 42996231)

· Piatt Technology Co., Ltd. (Unified Number: 82978126)

· Vohung Technology Co., Ltd. Taiwan Branch (Unified Number: 90640246)

· Sanfester Limited (Unified Number: 91037569)

· H&H Corporation (Unified Number: 50873465)

· Cuike Technology Co., Ltd. (Unified Number: 89155202)

· Absolute Digital Co., Ltd. (Unified Number: 82943268)

· Boao Technology Co., Ltd. (Unified Number: 50759458)

· Bit Generation Technology Co., Ltd. (Unified Number: 94250000)

· CoinVision Technology Co., Ltd. (Unified Number: 90481922)

· Coinlly Limited (Unified Number: 90492152)

· Power International Limited (Unified Number: 42827051)

The Financial Supervisory Commission has clearly stated that these operators are prohibited from providing any virtual asset services from today onwards, and violators will face severe penalties of up to 2 years of imprisonment and fines. Investors who still hold assets on these platforms should immediately transfer them to a legal platform to avoid the risk of having their assets frozen or unable to withdraw.

From the FTX Collapse to Strict Regulation: The Evolution of Cryptocurrency Regulation in Taiwan

Taiwan's encryption regulation did not come out of nowhere. After the FTX collapse in 2023 affected Taiwanese investors, the Financial Supervisory Commission initiated the VASP anti-money laundering framework. With the amendment to the Anti-Money Laundering Act taking effect in July 2024, operators must complete a series of compliance requirements:

· Complete AML registration

· Establish internal control and audit mechanisms

· Appoint a Money Laundering Reporting Officer (MLRO)

· Implement KYC and transaction monitoring

· Mandatory joining of VASP association

Operators who violate these regulations will face up to two years in prison or a fine of NT$5 million. The release of the Allowlist on September 22 marks an important milestone in the advancement of policies over the past two years, signifying that Taiwan's encryption market has officially entered the era of compliance.

Market Refinement: The Era of Oligopolistic Competition Arrives

Industry experts have long predicted that there may be only a handful of encryption service providers left in Taiwan, leading to an oligopoly competition landscape, and this prediction has now become a reality. The market changes brought about by deepening regulation are primarily reflected in three aspects:

1. Operating costs have significantly increased

Compliance processes require operators to invest significant funds in system construction, professional recruitment, and regular audits. Small platforms with insufficient funds find it difficult to bear these costs. According to indirect information, many operators that have abandoned virtual currency services primarily face increased compliance costs and are prohibited from cash transactions without proof of capital, making it difficult to continue operating OTC businesses.

2. Mergers and Accelerated Exits

The trend of "the big getting bigger" has already appeared, and large platforms with sufficient capital and compliance capabilities will absorb more users through mergers or business expansions. In the coming months, we may see more small exchanges being acquired or exiting the market on their own.

3. Enhanced Transparency and Security

The new regulatory framework requires that transactions and capital flows must be fully traceable, significantly reducing the space for anonymous operations. For investors, although they will face more cumbersome identification procedures in the short term, they will benefit from a safer trading environment and higher market trust in the long term.

Actions Investors Should Take Immediately

In the face of this significant change, investors should take the following actions immediately:

· Confirm the legality of the platform: Check whether the trading platform you are using is on the list of 9 legitimate VASPs.

· Transfer Assets: If your assets are stored on any of the 18 prohibited platforms, you should immediately transfer your assets to a legal platform.

· Complete identification verification: Even on a legal platform, ensure that all necessary KYC procedures are completed.

· Retain transaction records: Properly keep all transaction proofs for potential future tax or legal requirements.

· Follow up on subsequent developments: Continue to pay attention to any new regulations or list updates that may be issued by the Financial Supervisory Commission.

The recent major reshuffle of the virtual asset market in Taiwan is not only a strict requirement for operators but also a protection of investors' rights. When traditional financial institutions see clear law enforcement and compliance standards, the willingness of funds to enter the market is also expected to increase, bringing more institutional-level funds and long-term stability to the market.