Taiwan Passes First Crypto Regulation Law with Prison Terms for Violations

Taiwan's Legislative Yuan passed the 'Virtual Asset Service Act' on July 1, establishing the country's first regulatory framework for cryptocurrency and stablecoins. The bill has been sent to President Lai Ching-te, who is expected to sign it within 10 days.

The law requires all Virtual Asset Service Providers (VASPs) to obtain a license from the Financial Supervisory Commission (FSC) before operating. This includes exchanges, trading platforms, custodians, and lenders, which must meet requirements covering internal controls, cybersecurity systems, crypto listing and delisting rules, customer asset segregation, and financial reporting.

Companies or individuals that have already completed Anti-Money Laundering registration before the law takes effect will have 12 months to apply for a license and 21 months to secure full FSC approval.