FSC says to have limited oversight of virtual assets

While the Executive Yuan has yet to decide on a regulatory system for cryptocurrencies and initial coin offerings (ICOs), the Financial Supervisory Commission (FSC) yesterday said it would only oversee enforcement of money laundering policies.

The commission maintains an open stance and welcomes all industry innovations, Banking Bureau Deputy Director Sherri Chuang (莊秀媛) said at a news conference, adding that it prefers to monitor developments to avoid stifling early-stage growth.

As cryptocurrencies and the issuance of new “coins” are classified as commodities, the virtual assets do not fall under the commission’s jurisdiction, Chuang said.

The commission is only involved in preventing money laundering through virtual assets, she said.

The situation is similar to that of lease finance companies, where the commission’s involvement is limited to money laundering prevention, she added.

ICOs, which have been billed as the future of fundraising, do not cross any regulatory red lines in Taiwan, Securities and Futures Bureau Chief Secretary Chien Hung-ming (簡宏明) said.

Each ICO would be assessed on a case-by-case basis, he said, adding that regulators are primarily concerned with examining the fundraising prospectus of each coin issuance.

The commission would assess each issuance to determine if they should be classified as a security or a virtual commodity, he added.

“It is very difficult to define broadly, as each case is different,” Chien said.

Separately yesterday, the commission confirmed that four Taiwanese companies are waiting to seek a stock listing for their Chinese subsidiaries.

To prevent equity dilution and inadequate transparency, the Taiwan Stock Exchange and Taipei Exchange have implemented rules to ensure shareholders’ interests, the commission said.

Taiwan-based parent companies would be required to seek board of directors and shareholder approval, as well as third-party expert opinions, before they may cut holdings in China-based subsidiaries by more than 3 percent within three years, the commission said.