Taiwan is set to name its top financial regulator as the main authority overseeing cryptocurrencies as it steps up control over the industry following market turmoil triggered by the collapse of the FTX crypto empire.
The announcement of the Financial Supervisory Commission (FSC) as the chief regulator of cryptocurrency exchanges and virtual assets could come by the end of this month, a person familiar with the matter said.
The Cabinet and the FSC have been working with other government departments and talking to industry representatives to draft a concrete plan, other people familiar with the discussions said.
Photo: Tu Chien-jung, Taipei Times
The move would be the first time that Taiwan has officially appointed a regulator for the cryptocurrency industry, and a shift from its relatively hands-off approach as authorities ramp up oversight amid a turbulent year.
By contrast, its regional peers have taken a more active stance — Singapore has proposed tighter rules on retail crypto trading, while Hong Kong is powering ahead with enacting more industry-friendly rules to turn the city into a crypto hub.
The commission is to follow the Cabinet’s instructions on the next steps, including the timing of any announcement, FSC Chairman Thomas Huang (黃天牧) told reporters yesterday at the legislature.
After the main crypto regulator and overall guidelines for regulations are announced, the commission would likely work with industry participants on “self-regulation measures,” Huang said.
The commission is to focus on regulating payment and trading-related virtual assets, and the Cabinet plans to assign the rest to other government departments, Huang said.
Non-fungible tokens (NFTs) would not be under its supervision, he added.
He also said “it’s way too early” to discuss forming a separate legislation for virtual assets.
The commission only requires crypto platforms registered domestically to comply with its anti-money laundering requirements. There is not yet any legislation that directly applies to virtual assets.
In response to the upcoming changes, cryptocurrency exchanges are trying to rally support from local companies for less onerous regulation.
A joint paper sent from Binance Holdings Ltd, Matrixport Technologies Ltd and Woo Network LLC on Saturday called for more friendly regulation that provides “clarity” for players operating in Taiwan.
The companies hope to garner more local support before delivering the paper to officials, people familiar with the matter said.
“From our observations, some markets that tried to regulate virtual assets under existing financial rules and categorizations experienced great difficulty, as the rules lacked clarity and made it very confusing for business operators, authorities and customers,” the paper said.
Taiwan should reference regulatory frameworks in the EU and Dubai, where authorities set up independent and designated departments for virtual assets separate to traditional finance, it said.
Tougher regulation could lead to financial losses for customers who are already participating in global market trading, and force crypto trading activities to go “underground,” hurting industry growth and regulatory progress, the paper added.
The commission’s Banking Bureau, which regulates traditional lenders, has been driving the changes and has held talks with crypto exchange operators, people familiar with the matter said.
Exchanges that provide virtual asset trading services are to be the first within the industry to be regulated under the commission, they said.
Other FSC bureaus could still be involved in the final regulatory decision given the complexity of virtual assets, they added.
For example, virtual assets with the characteristics of marketable securities could be regulated by the Securities and Futures Bureau, NFT regulation could involve the Ministry of Digital Affairs, and stablecoins associated with fiat money could involve the central bank, they said.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in