Crypto License in Taiwan

General information about the Taiwan crypto license

The Financial Supervisory Commission (FSC), formed on July 1st, 2004, is in charge of overseeing the nation’s financial markets, including the cryptocurrency sector. It was established to bring together several regulatory agencies to effectively manage the rapidly growing financial industry. It guarantees financial stability by controlling securities markets, banking, and insurance. This further encourages the growth of financial markets.

Beyond the FSC, many governmental agencies oversee Taiwan’s cryptocurrency business. Though cryptocurrencies are not accepted as legal money, the Central Bank of the Republic of China (Taiwan) monitors transactions. It also provides several pertinent recommendations. The nation’s Ministry of Justice (MOJ), which upholds anti-money laundering (AML) regulations, ensures continued compliance. Finally, promoting self-regulation, the Taiwan Virtual Asset Service Provider Association (TVASPA) serves as a link between the government and the crypto sector.

Although they are acknowledged as investment assets and governed in a different fashion, cryptocurrencies are not accepted as legal tender in Taiwan. Since 2013, the FSC has introduced many new policies and issued several announcements to clarify that cryptocurrencies are perceived as virtual goods rather than official cash.

Key applicable laws include:

• Anti-Money Laundering (AML) Regulations – Crypto platforms must comply with AML regulations under the Money Laundering Control Act. This requirement has been in effect since November 7, 2018. The scope of businesses covered under the AML Act was further clarified by the Executive Yuan on April 7, 2021. These regulations took effect on July 1, 2021.
• Securities and Exchange Act (SEA) – Applicable in case a cryptocurrency is deemed a security token.
• Security Token Offering (STO) Regulations – Issued in 2019, these specify compliance measures for security tokens.

Registered businesses must follow rigorous AML and KYC rules as advised by the FSC and other relevant authorities, even if there is no particular license needed for running a crypto exchange or money transfer service in Taiwan. These include setting up internal control systems, tracking dubious transactions, and guaranteeing real-name confirmation for most transfers.

There is no minimum share capital required, and there are many other advantageous points when it comes to this jurisdiction.

Taiwan Crypto License: Process and Duration

Getting a Virtual Asset Service Provider (VASP) license in Taiwan usually takes four to six months overall. This schedule covers preparation, filing of applications, evaluation, and ultimate clearance.

A more detailed breakdown of the process is as follows:

1. Preparation Stage – Beginning with the FSC rules and AML standards, educate yourself on what it takes to acquire a license. Create an all-encompassing business strategy outlining your virtual asset services, target market, and compliance measures.
2. Application – Prepare and send to the FSC all the required paperwork. The package will include your business strategy, AML rules, company structure, and details of key personnel.
3. Review and Assessment – The FSC first reviews the package to make sure all of your documentation is complete. Next, it carefully examines your firm’s strategy, AML rules, and capacity to satisfy legal criteria.
4. Compliance Check – Verify your AML regulations are strong. The FSC could look at the background records of all important individuals.
5. Approval and Operation – The FSC gives conditional permission upon satisfying all requirements. This is usually followed by final approval and issuance of the VASP license.

As already touched upon, the document package may include the following:

• A detailed business plan;
• AML compliance statement and policies;
• Technical documentation to demonstrate your capability to operate in the crypto market;
• Tax records and financial statements;
• Personal identification and background information for key personnel.

To ensure compliance, you have to put an AML Officer in charge of guaranteeing adherence to AML rules. This officer has to be well familiar with AML and counter-terrorism funding (CTF) responsibilities.

Beyond that, you’ll need to establish a physical office in the country, equipped to manage the operations and compliance requirements of a VASP. Directors must all have a clean criminal background, appropriate knowledge of AML/CTF responsibilities, and pertinent experience in financial services or allied sectors.

Partnerships with local banks or Electronic Money Institutions (EMIs) to enable transactions and provide financial services can help further boost your bottom line and are a part of the process.

The different types of crypto licenses in Taiwan

As per the FSC rules, a Virtual Asset Service Provider (VASP) license is required for any firm offering services connected to virtual assets, including crypto exchanges, wallet services, and other related operations. The Commission’s “Guidelines for the Administration of Virtual Asset Service Providers” outlines this obligation.

The VASP license is meant to guarantee that companies engaged in virtual asset services follow rigorous AML, CTF, and other rules. Entities have to follow FSC policies, run strong AML systems, and regularly report on compliance. Operating lawfully inside Taiwan’s controlled crypto scene requires this license.

What is permitted with a VASP license:

• Operating a Cryptocurrency Exchange – This includes offering services to both retail and institutional clients, providing a secure and regulated environment for crypto transactions.
• Providing Wallet Services – Entities with a VASP license may provide digital wallet services, which enable customers to safely save, transmit, and receive crypto. These services have to work extra hard to satisfy FSC compliance criteria to guarantee user security.
• Compliance and Market Trust – Maintaining a VASP license greatly increases the reputation and commercial trustworthiness of a company. Following local rules draws institutional investment and more consumers.
• Membership in Self-Regulatory Organizations – Licensed VASPs may become members of the Taiwan Virtual Asset Service Provider Association. This encourages self-regulation and industry-wide adherence to the best standards possible. Membership offers more control and helps to uphold compliance requirements.
• Launching a Crypto Project – You can also launch a project that is not a wallet or a crypto exchange. It’s important to seek out individualized solutions, however.

These licenses are essential for conducting cryptocurrency operations in Taiwan in a regulated and secure manner. They protect both service providers and customers by ensuring compliance with local laws and beyond.