Taiwanese Legislators Preparing a Special Cryptocurrency Law Proposal

Taiwanese legislators have taken action due to growing concerns about offshore exchanges. They announced plans to introduce a special cryptocurrency law proposal by the end of November to prevent regulatory arbitrage.

Amidst the growing worldwide attention on cryptocurrencies and blockchain technology, many nations are striving to regulate activities in this domain. The recent emphasis on crypto regulations is evident from Europe’s MiCA agreement and the U.S. SEC’s intensified scrutiny of exchanges. Taiwan is now poised to join these ranks.

As concerns over offshore cryptocurrency exchanges escalate in Taiwan, legislators aim to present a specialized bill to the parliament by the end of November. According to information compiled by The Block, Yung-Chang Chiang, a member of Taiwan’s Legislative Yuan, highlighted the distinction of the crypto asset class from traditional financial products. Chiang argues that companies in this sector need to be governed by a specific law.

In this context, virtual asset service providers, legal experts, and academics in Taiwan convened to discuss the draft law proposed by Chiang. However, despite the self-regulatory rules issued by the Taiwan Financial Supervisory Commission for the crypto industry, lawmakers contend that these rules lack a legal foundation.

Mandatory Official Permission on the Horizon

The newly proposed legislation will make it mandatory for crypto platforms operating in Taiwan to obtain official permission. Platforms that fail to secure this authorization will face the risk of halting their operations.

Winston Hsiao, co-founder of Taipei-based crypto exchange XREX, emphasized the necessity for compliance in the crypto sector. He asserted that these regulations need to be implemented “step by step.” Hsiao further remarked that debates on the special law should focus on regulating platforms based on their sizes.

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