The forthcoming Virtual Asset Management Act FSC unveils fourstage management plan to be submitted to Executive Yuan in June 2025
The formulation of the Virtual Asset Service Provider (VASP) Act has finally made clear progress. Financial Supervisory Commission Chairman, Huang Tien-lung, will report to the Finance Committee on the 12th, expecting to gradually promote the management of virtual asset operators in four stages, and plans to propose the draft law by the end of 2024, with the goal of completing the draft and submitting it to the legislature for review by June 2025.
Financial Supervisory Commission first publicly confirmed the enactment of the Act.
Phase One: Bringing virtual asset operators under regulation.
Phase Two: Establishing associations and formulating self-discipline regulations.
Phase Three: Strengthening Anti-Money Laundering (AML) management.
Phase Four: Enacting the Act.
This is the first time the Financial Supervisory Commission has detailed the schedule and plan for establishing the Virtual Asset Management Act. The formulation of the Act will refer to international regulatory standards, focusing on six major regulatory points, including operator licensing conditions, consumer protection, capital requirements, asset management, market trading behavior norms, and business development.
In the first phase, the Financial Supervisory Commission will start by regulating anti-money laundering measures for Virtual Asset Service Providers (VASPs) and begin to bring related operators under regulation. Currently, 25 operators have completed compliance declarations, covering a range of business types such as exchanges, trading platforms, physical storefronts, virtual asset ATMs (BTMs), and custody system providers.
Phase Two will promote the establishment of associations for VASPs and the formulation of self-discipline regulations. The association will formulate self-discipline regulations based on the eight guiding principles set by the Financial Supervisory Commission. It is expected that VASPs will formally establish the association this Thursday (the 13th).
In the third phase, the Financial Supervisory Commission will add VASP registration requirements to the AML law, clearly defining VASPs and imposing criminal penalties on illegal operators. VASPs engaging in business without proper registration can face up to two years in prison and a fine of up to 5 million NT dollars. The Financial Supervisory Commission plans to manage registered VASPs differentially based on the complexity of their operations.
VASPs operating as exchanges must adhere to the most comprehensive internal control regulations, including transaction matching rules, information system establishment (compliance with ISO27001 information security requirements), wallet management (at least over half in cold wallets), and platform and client asset separation.
Among the 25 VASPs that have completed the AML compliance declaration are exchange-type operators such as ACE, BitoEX, MaiCoin, XREX, and HOYA, all of which must comply with the comprehensive regulations.
The final stage will move towards the enactment of the Act. The Financial Supervisory Commission will commission a study on VASP management regulations in January 2024, taking into account various countries and international standards to determine the six major regulatory points. The research team is expected to submit a final report by the end of September 2024 and propose the draft law by the end of the year, holding a public hearing. The Financial Supervisory Commission plans to submit the draft law to the legislature for review by June 2025.
This marks the first time the Financial Supervisory Commission has clearly outlined the promotion plan for the Virtual Asset Management Act, demonstrating the government’s attention to the virtual asset market. With the gradual formulation and implementation of the Act, the market is expected to embrace a more regulated and secure development environment, further safeguarding the rights of investors.
