Overseas cryptocurrency operators at a loss FSC Chairman Perng Chinlung responds Regulatory challenges require crossborder cooperation
Chairman of the Financial Supervisory Commission (FSC), Thomas Huang, today (6/12) answered questions at the Finance Committee. Legislator Chiu Chih-wei inquired about the current progress of the regulations for Virtual Asset Service Providers (VASPs), specifically the “First Stage: Regulating Virtual Asset Operators,” which is nearing completion. Chairman Huang mentioned that the VASP association will be established tomorrow (6/13), and the self-regulation standards will be jointly developed by operators and the FSC. However, will non-registered operators in Taiwan have an easier time instead?
The current regulations focus on registering VASP operators in Taiwan. Legislator Chiu Chih-wei asked, “What if they are registered abroad but operate in Taiwan?”
Chairman Huang explained that according to the regulations, all cross-border operators should establish a presence in Taiwan and comply with anti-money laundering and anti-terrorism financing regulations. For overseas operators not registered in Taiwan, due to the borderless nature of the internet, supervision becomes challenging and requires international cooperation to address.
Legislator Chiu Chih-wei questioned the disparity in treatment between registered operators in Taiwan, who face sanctions for violations, and unregistered overseas operators.
Chairman Huang acknowledged the regulatory difficulties posed by international scenarios, such as when Taiwanese individuals purchase insurance products from American websites, which cannot be prohibited by local laws. The FSC can only advise investors not to engage in such activities.
Huang pledged to propose measures in the next year’s specialized law version submitted to the Executive Yuan, drawing on how other countries handle unregistered overseas operators.
Previously, the FSC stated that unregistered operators would face criminal liability, but this only applies to companies registered in Taiwan. Enforcement against overseas operators operating and promoting in Taiwan is limited in terms of identifying actual beneficiaries. Enforcement investigations can only be conducted on Taiwanese employees or partners, but based on past cases like FTX, JPEX, and AAX, actual enforcement and penalties have not been implemented.
