Taiwan's virtual asset supervision is about to be upgraded! FSC: Will be regulated in 4 phases, and the anti-fraud performance will be scored

Virtual asset supervision upgrade, four-stage gradual inclusion

Financial Supervisory Commission (FSC) Chairman Huang Tien-Mu stated at the 'FinTechOn 2024 Forum' on November 4th that Taiwan has a certain foundation and technological capability in developing the virtual asset industry, with relatively complete infrastructure. It is expected that this industry will have considerable development potential in the future. Adhering to the spirit of 'safety and development in parallel,' the FSC will gradually promote various regulatory measures to promote the compliance, standardization, and sound development of Virtual Asset Service Providers (VASPs), while enhancing protection of the rights and interests of investors and consumers.

Peng Jinlong pointed out that Taiwan's management of virtual assets is carried out in four stages through a process of "gradual inclusion".

Money Laundering Prevention and Management VASP: First, require the operator to implement legal compliance with Money Laundering Prevention.

VASP Self-regulation: Encourage VASP to establish associations to enhance industry activities through self-regulation.

Legislative strengthening of VASP registration: Promote legislation to enhance the Money Laundering prevention registration system for VASP, and incorporate it into the "Anti-Fraud Act" to strengthen behavioral management.

Establish a special law for virtual asset management: It is expected to submit the special law for virtual asset management to the Executive Yuan before June 2025 and begin the legislative process.

Currently, VASP has officially established an association at the end of August and is developing various self-discipline regulations, such as customer asset segregation management, fair and transparent trading, and information security. The Financial Supervisory Commission and the Securities and Futures Bureau will assist in the implementation of these self-discipline regulations. Peng Jinlong particularly emphasized that the Legislative Yuan passed the amendment to the Money Laundering Prevention Act on July 16th this year, and the Financial Supervisory Commission is formulating authorized enforcement. In the future, those who carry out relevant business without registration will face criminal liability.

Image source: 'encryption City' edited photo by FSC Chairman, Mr. Peng Chung-Kang

Strengthening anti-fraud efforts and incorporating performance into rating criteria

Regarding the rampant virtual asset scams in recent times, Pang Jinlong stated that virtual asset scams have become a social security threat faced by the international community. He shared a joke from ChatGPT: 'What do BTC and scams have in common? They both make our money disappear.' This emphasizes the severity of the scam problem.

Peng Jinlong proposed that the FSC will adopt a strategy of "professionalization, normalization, sustainability, and organizationalization" in anti-fraud measures:

Professionalization: Encourage financial institutions and VASPs to vigorously research and apply technology anti-fraud techniques, collaborate with the power of the masses to prevent fraud.

Normalization: Integrate anti-fraud measures into daily operations, remain vigilant against suspicious accounts and abnormal transactions, and enhance customer education and awareness to make it the industry's DNA.

Persistence: Regard fraud prevention as a prolonged battle, maintain the determination of "the evildoer may be a foot tall, but the righteous is a foot and a half tall", and continuously strengthen anti-fraud measures.

Organized: Financial Institution and VASP operators need to establish an internal anti-fraud unit to concentrate resources for joint anti-fraud efforts. The FSC has established an anti-fraud task force to supervise the relevant work vigorously.

He further stated that in the future, the FSC will incorporate the anti-fraud performance of Financial Institutions and VASPs into important evaluation indicators, encouraging industry participants to actively engage in anti-fraud efforts. Finally, Perng Jin-lung called on all sectors of society to work together for the future development of financial technology and virtual assets, and to strive to build a safer and fraud-free society.