The Financial Supervisory Commission (FSC) of Taiwan recently announced stricter regulatory measures for virtual asset operators, sparking widespread discussion. The prosecutorial reform group, Judicial Reform Foundation (JRF), expressed concerns about this policy through a recent statement, fearing that it could lead to more judicial disputes.
FSC plans to modify the Anti-Money Laundering Act and implement a registration system to regulate virtual asset operators. Under the new policy, virtual asset operators conducting business without formal registration will face criminal liability. While the aim is to strengthen supervision, the JRF warned that this could lead to more judicial chaos.
JRF pointed out that Taiwan currently faces a large number of virtual currency fraud cases, resulting in significant losses for victims. Investigating these cases is extremely challenging. They believe that these issues stem from administrative management loopholes, making it difficult for judicial authorities to determine legal obligations and criminal intent.
JRF stated, “It is difficult for the judiciary to determine their legal duty of care and criminal intent. For example, in current practice, many suspects claiming to be individual currency traders argue that they have not violated any rules and were unaware of the situation. Recently, a certain individual currency trader caused significant losses to victims but was acquitted. The entire Taiwan has entered a state of anarchy, and the prosecutors are almost powerless.”
The FSC’s policy seems to be biased towards only guiding large exchanges and platform operators, while neglecting smaller or non-mainstream currency traders. JRF criticized this approach for overlooking the breadth of the market, merely focusing on surface-level management rather than comprehensive regulation.
“During every meeting, they only seek declarations from a few operators, disregarding reality. Each department avoids the hot potato and changes the competent authority from the Banking Bureau to the Securities and Futures Bureau. They even discuss classifying virtual currencies into stable coins and unstable coins, suggesting that stable coins fall under the jurisdiction of the central bank.”
JRF emphasized that the FSC should not only pursue criminal liability but also establish a comprehensive administrative management framework. They pointed out that the current policies and related regulations have confusion in defining virtual currencies, which is unfair to both operators and investors, and does not contribute to creating a transparent and fair market environment.
JRF proposed a series of recommendations, including bringing individual currency traders under formal regulation and requiring them to comply with clear norms such as business registration, tax registration, and following KYC procedures. They hope that through these measures, market irregularities can be reduced, future legal disputes can be avoided, and investor interests can be protected.
JRF will continue to monitor this issue and promote these initiatives in future seminars. They urge the new chairman of the FSC to abandon old thinking patterns and work together to create a more just and effective regulatory environment.
JRF
FSC