Chairman of the Financial Supervisory Commission, Peng Junlong, today (6/12) at the Finance Committee inquiry, when asked by legislator Qiu Zhiwei, stated that the current regulations regarding Virtual Asset Service Providers (VASPs) are nearing completion in the first phase of “regulating virtual asset operators”. Chairman Peng Junlong mentioned that the VASP association will also be established tomorrow (6/13), and the self-regulation standards will be jointly formulated by operators and the Financial Supervisory Commission. However, for operators not registered in Taiwan, does this mean they will have an easier time?
Special regulations for virtual asset management are on the horizon: FSC announces a four-stage management plan, to be submitted to the Executive Yuan in June 2025.
Regulation is limited to operators registered in Taiwan, but what about those who are not registered?
While the FSC has penalties, enforcement is difficult. In the current regulations, VASP operators are primarily required to be registered in Taiwan. Legislator Qiu Zhiwei asked, “What if they are registered overseas but operate in Taiwan?”
Chairman Peng Junlong stated that according to regulations, all cross-border operators should have a presence in Taiwan and comply with anti-money laundering and counter-terrorism financing regulations. Overseas operators not registered in Taiwan pose challenges in supervision due to the borderless nature of the internet, necessitating international cooperation for oversight.
Legislator Qiu Zhiwei questioned the disparity in treatment between operators registered and not registered in Taiwan, with the former subject to various regulations and sanctions for violations, while the latter seemingly unaffected.
Chairman Peng Junlong acknowledged the international regulatory challenges, citing an example where Taiwanese individuals purchase insurance products from a U.S. website, which cannot be prohibited by domestic laws. The FSC can only advise investors against such actions.
Peng Junlong pledged to propose measures in the next year’s version of the administrative law, referencing how other countries handle unregistered overseas operators.
Previously, the FSC had stated that unregistered operators would face criminal liability, but this only applied to companies registered in Taiwan. For overseas operators without registration in Taiwan but conducting operations and promotions in Taiwan, enforcement is limited in terms of prosecuting the actual beneficiaries. Enforcement investigations can only target employees or partners in Taiwan, but based on past cases like FTX, JPEX, and AAX, there have been no actual enforcement actions or penalties.
Overseas operators
Peng Junlong
Regulation
Qiu Zhiwei
Further reading:
Special regulations for virtual asset management are on the horizon: FSC announces a four-stage management plan, to be submitted to the Executive Yuan in June 2025
Possibility of opening up delegated buy-ins for Bitcoin ETFs? Peng Junlong reveals plans to first open to institutions and sign risk disclosure agreements.