February 2025
Overview of Taiwan's Regulatory Measures for Virtual Asset Service Providers
January 2025
Teresa Huang and Lilian Hsu
Taiwan's regulation of virtual asset service providers (“VASPs”) has adopted a gradual and progressive approach. Initially, Taiwan began regulating VASPs by implementing anti-money laundering (“AML”)-focused measures, followed by the establishment of self-regulatory organizations to strengthen communication between the government and the industry. The implementation of registration regulations further enhanced public sector oversight of VASPs. This article provides an overview of Taiwan's regulatory progress for VASPs and their current compliance requirements.
1. Evolution of VASP Regulation
(1) Early Stage: AML as the Starting Point for VASP Regulation
In 2021, Taiwan announced the Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises Handling Virtual Currency Platform or Transaction (“VASP AML Regulations”), imposing AML compliance obligations on VASPs. These obligations included completing an AML declaration and adhering to rules on customer due diligence (“CDD”) and ongoing transaction monitoring.
In September 2023, the Financial Supervisory Commission (“FSC”) issued the Guidelines for the Administration of Virtual Asset Service Providers (“VASP Guidelines”), reflecting its intent to broaden regulatory oversight of VASPs. Key focus areas included mechanisms for the issuance, listing, and delisting of virtual assets, safeguarding customer assets, and establishing comprehensive internal rules. [1] FSC has also highlighted in the VASP Guidelines that VASPs should take the initiative to form a self-regulatory organization and establish self-regulatory codes.
(2) Current Stage: Joint Efforts by the Public and Private Sectors to Strengthen Market Discipline and Fraud Prevention
In 2024, Taiwan, driven by the FSC, introduced and revised several major regulations impacting VASPs to prevent fraud and disrupt illicit financial flows. Key measures include requiring VASPs to fulfill anti-fraud obligations and implementing registration regulations.
Additionally, with FSC’s support, the Taiwan Virtual Asset Service Providers Association (“VASP Association”) was officially established in June 2024. From November 2024 to January 2025, the VASP Association issued seven self-regulatory codes covering topics such as the self-regulatory charter for members, virtual asset listing and delisting, customer protection, AML/CFT, anti-fraud and joint defense reporting systems, cybersecurity, and asset segregation.
(3) Future Stage: Anticipated Enactment of a Dedicated VASP Law
The FSC has employed a step-by-step approach to guide the industry in building a compliance culture. It plans to propose a draft VASP law to the Executive Yuan in June 2025, encompassing various regulatory aspects of VASPs.
2. Regulatory Requirements for VASPs
VASPs operating regulated virtual asset services in Taiwan are primarily subject to requirements related to registration, anti-fraud, and AML compliance. The crucial regulations are outlined below:
(1) VASP Registration Regulations
Since November 30, 2024, Taiwan has implemented VASP registration regulations.
VASPs are prohibited from providing regulated virtual asset services before completing AML registration. Violations may result in individuals facing imprisonment of up to two years and/or fines of up to NT$5 million, while legal entities may be fined up to NT$50 million (Article 6 of the Money Laundering Control Act and the Anti-Money Laundering Registration Regulations for Virtual Asset Service Providers (“VASP Registration Regulations”)).[2]
Under the current registration regulations, VASPs are categorized into five types: Virtual Asset Exchangers, Virtual Asset Trading Platforms, Virtual Asset Transferors, Virtual Asset Custodians, and Virtual Asset Underwriters. While all VASPs must comply with general regulations, additional obligations are imposed based on the specific services provided. For example, Virtual Asset Trading Platforms that offer centralized trading markets must establish reviewing standards and procedures for listing and delisting virtual assets.[3]
(2) Fraud Prevention Regulations
To combat fraud effectively, the Legislative Yuan passed the Fraud Crime Hazard Prevention Act (“FCHPA”) in July 2024, imposing various anti-fraud obligations on VASPs, such as cooperating with authorities to establish a joint defense reporting system. Non-compliance may result in fines ranging from NT$200,000 to NT$2 million (Articles 7 to 13 of the FCHPA). [4]
(3) AML Regulations
As mentioned above, Taiwan has included VASPs in its AML framework since 2021, requiring them to conduct CDD, ongoing transaction monitoring, and suspicious transaction reports. In November 2024, the FSC amended certain provisions of the VASP AML Regulations to strengthen compliance, including:
To balance financial innovation, consumer protection, and market discipline, the FSC has adopted a phased regulatory approach for VASPs. Through the issuance of guidelines and support for the development of self-regulatory codes, the FSC aims to foster a compliance culture within the crypto industry. Given the evolving regulatory landscape, VASPs must stay updated on the latest legal developments and make adjustments to their internal controls and operational practices as required.
[1] Teresa Huang and Lilian Hsu, “Taiwan FSC Announced the Guidelines for the Administration of Virtual Asset Service Providers (VASP)” (Last viewed on Jan 13, 2025)
[2] Aaron Chen and Lilian Hsu, “Taiwan Passes Virtual Asset Service Providers Registration Regime ─ FSC Strengthens VASP Supervision Through Anti-Money Laundering Measures” (Last viewed on Jan 13, 2025)
[3] Teresa Huang and Lilian Hsu, “Anti-Money Laundering Registration Regulations for Virtual Asset Service Providers Announced by Taiwan FSC” (Last viewed on Jan 13, 2025)
[4] Aaron Chen, Pei-Ching Ji, Doris Hsu, Chuck Liu, “Series Articles on Taiwan’s New Anti-Fraud Laws and Regulations (1) – Corporate Cooperation Obligations and Preventive Measures under the Fraud Crime Prevention Act” (Last viewed on Jan 13, 2025)
The contents of all materials (Content) available on the website belong to and remain with Lee, Tsai & Partners. All rights are reserved by Lee, Tsai & Partners, and the Content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior permission of Lee, Tsai & Partners.
The Content is for informational purposes only and is not offered as legal or professional advice on any particular issue or case. The Content may not reflect the most current legal and regulatory developments. Lee, Tsai & Partners and the editors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The contributing authors' opinions do not represent the position of Lee, Tsai & Partners. If the reader has any suggestions or questions, please do not hesitate to contact Lee, Tsai & Partners.
Teresa Huang and Lilian Hsu
Taiwan's regulation of virtual asset service providers (“VASPs”) has adopted a gradual and progressive approach. Initially, Taiwan began regulating VASPs by implementing anti-money laundering (“AML”)-focused measures, followed by the establishment of self-regulatory organizations to strengthen communication between the government and the industry. The implementation of registration regulations further enhanced public sector oversight of VASPs. This article provides an overview of Taiwan's regulatory progress for VASPs and their current compliance requirements.
1. Evolution of VASP Regulation
(1) Early Stage: AML as the Starting Point for VASP Regulation
In 2021, Taiwan announced the Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises Handling Virtual Currency Platform or Transaction (“VASP AML Regulations”), imposing AML compliance obligations on VASPs. These obligations included completing an AML declaration and adhering to rules on customer due diligence (“CDD”) and ongoing transaction monitoring.
In September 2023, the Financial Supervisory Commission (“FSC”) issued the Guidelines for the Administration of Virtual Asset Service Providers (“VASP Guidelines”), reflecting its intent to broaden regulatory oversight of VASPs. Key focus areas included mechanisms for the issuance, listing, and delisting of virtual assets, safeguarding customer assets, and establishing comprehensive internal rules. [1] FSC has also highlighted in the VASP Guidelines that VASPs should take the initiative to form a self-regulatory organization and establish self-regulatory codes.
(2) Current Stage: Joint Efforts by the Public and Private Sectors to Strengthen Market Discipline and Fraud Prevention
In 2024, Taiwan, driven by the FSC, introduced and revised several major regulations impacting VASPs to prevent fraud and disrupt illicit financial flows. Key measures include requiring VASPs to fulfill anti-fraud obligations and implementing registration regulations.
Additionally, with FSC’s support, the Taiwan Virtual Asset Service Providers Association (“VASP Association”) was officially established in June 2024. From November 2024 to January 2025, the VASP Association issued seven self-regulatory codes covering topics such as the self-regulatory charter for members, virtual asset listing and delisting, customer protection, AML/CFT, anti-fraud and joint defense reporting systems, cybersecurity, and asset segregation.
(3) Future Stage: Anticipated Enactment of a Dedicated VASP Law
The FSC has employed a step-by-step approach to guide the industry in building a compliance culture. It plans to propose a draft VASP law to the Executive Yuan in June 2025, encompassing various regulatory aspects of VASPs.
2. Regulatory Requirements for VASPs
VASPs operating regulated virtual asset services in Taiwan are primarily subject to requirements related to registration, anti-fraud, and AML compliance. The crucial regulations are outlined below:
(1) VASP Registration Regulations
Since November 30, 2024, Taiwan has implemented VASP registration regulations.
VASPs are prohibited from providing regulated virtual asset services before completing AML registration. Violations may result in individuals facing imprisonment of up to two years and/or fines of up to NT$5 million, while legal entities may be fined up to NT$50 million (Article 6 of the Money Laundering Control Act and the Anti-Money Laundering Registration Regulations for Virtual Asset Service Providers (“VASP Registration Regulations”)).[2]
Under the current registration regulations, VASPs are categorized into five types: Virtual Asset Exchangers, Virtual Asset Trading Platforms, Virtual Asset Transferors, Virtual Asset Custodians, and Virtual Asset Underwriters. While all VASPs must comply with general regulations, additional obligations are imposed based on the specific services provided. For example, Virtual Asset Trading Platforms that offer centralized trading markets must establish reviewing standards and procedures for listing and delisting virtual assets.[3]
(2) Fraud Prevention Regulations
To combat fraud effectively, the Legislative Yuan passed the Fraud Crime Hazard Prevention Act (“FCHPA”) in July 2024, imposing various anti-fraud obligations on VASPs, such as cooperating with authorities to establish a joint defense reporting system. Non-compliance may result in fines ranging from NT$200,000 to NT$2 million (Articles 7 to 13 of the FCHPA). [4]
(3) AML Regulations
As mentioned above, Taiwan has included VASPs in its AML framework since 2021, requiring them to conduct CDD, ongoing transaction monitoring, and suspicious transaction reports. In November 2024, the FSC amended certain provisions of the VASP AML Regulations to strengthen compliance, including:
- Annual AML risk assessment reports: VASPs must prepare these reports annually and submit them to the FSC for filing by the end of March of the following year (this replaces the previous requirement of biennial reporting, which was only submitted upon FSC’s request) (Article 14 of the VASP AML Regulations).
- Adequate compliance personnel: VASPs must allocate sufficient and competent compliance staff (Article 15, Paragraph 5 of the VASP AML Regulations).
- Compliance with laws and self-regulatory codes: VASPs must adhere to both legal and self-regulatory requirements (Article 15, Paragraph 1 of the VASP AML Regulations). Similar provisions are found in Article 10 of the VASP Registration Regulations, which grant a certain degree of enforceability to self-regulatory codes issued by the VASP Association.
To balance financial innovation, consumer protection, and market discipline, the FSC has adopted a phased regulatory approach for VASPs. Through the issuance of guidelines and support for the development of self-regulatory codes, the FSC aims to foster a compliance culture within the crypto industry. Given the evolving regulatory landscape, VASPs must stay updated on the latest legal developments and make adjustments to their internal controls and operational practices as required.
[1] Teresa Huang and Lilian Hsu, “Taiwan FSC Announced the Guidelines for the Administration of Virtual Asset Service Providers (VASP)” (Last viewed on Jan 13, 2025)
[2] Aaron Chen and Lilian Hsu, “Taiwan Passes Virtual Asset Service Providers Registration Regime ─ FSC Strengthens VASP Supervision Through Anti-Money Laundering Measures” (Last viewed on Jan 13, 2025)
[3] Teresa Huang and Lilian Hsu, “Anti-Money Laundering Registration Regulations for Virtual Asset Service Providers Announced by Taiwan FSC” (Last viewed on Jan 13, 2025)
[4] Aaron Chen, Pei-Ching Ji, Doris Hsu, Chuck Liu, “Series Articles on Taiwan’s New Anti-Fraud Laws and Regulations (1) – Corporate Cooperation Obligations and Preventive Measures under the Fraud Crime Prevention Act” (Last viewed on Jan 13, 2025)
The contents of all materials (Content) available on the website belong to and remain with Lee, Tsai & Partners. All rights are reserved by Lee, Tsai & Partners, and the Content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior permission of Lee, Tsai & Partners.
The Content is for informational purposes only and is not offered as legal or professional advice on any particular issue or case. The Content may not reflect the most current legal and regulatory developments. Lee, Tsai & Partners and the editors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The contributing authors' opinions do not represent the position of Lee, Tsai & Partners. If the reader has any suggestions or questions, please do not hesitate to contact Lee, Tsai & Partners.
