Overseas cryptocurrency operators at a loss FSC Chairman James Peng responds Regulatory challenges require crossborder cooperation
Chairman of the Financial Supervisory Commission, Pang Ching-Long, was questioned by legislator Chiu Chih-Wei during the Finance Committee meeting on June 12th. He mentioned that the first phase of regulations for VASP (Virtual Asset Service Providers) is nearing completion. Chairman Pang Ching-Long stated that the VASP association will be established on June 13th, with self-regulation guidelines to be jointly developed by operators and the Financial Supervisory Commission. However, for operators not registered in Taiwan, does this mean they will have an easier time?
The current regulations mainly focus on registering VASP operators in Taiwan. Legislator Chiu Chih-Wei inquired, “What if they are registered overseas but operate in Taiwan?”
Chairman Pang Ching-Long explained that according to regulations, all cross-border operators should establish a presence in Taiwan and comply with anti-money laundering and counter-terrorism financing regulations. Overseas operators not registered in Taiwan pose supervision challenges due to the borderless nature of the internet, requiring international cooperation for oversight.
Legislator Chiu Chih-Wei raised concerns about the disparity in regulatory enforcement between registered operators in Taiwan and unregistered overseas operators.
Chairman Pang Ching-Long acknowledged the international regulatory difficulties, citing examples where domestic laws cannot prevent citizens from purchasing products from foreign websites. The Financial Supervisory Commission can only advise investors not to engage in such activities.
Pang Ching-Long promised to propose measures inspired by how other countries handle unregistered overseas operators in the special law version to be submitted to the Executive Yuan next year.
Previously, the Financial Supervisory Commission had stated that unregistered operators would face criminal liability, but this only applied to registered companies in Taiwan. Enforcement against overseas operators operating in Taiwan without registration is limited to investigating actions involving local employees or partners. However, past cases involving FTX, JPEX, and AAX have not resulted in actual enforcement or penalties.
