TAIWAN Law and Practice Contributed by: Robin Chang, Ken-Ying Tseng and Eddie Hsiung, Lee and Li, Attorneys-at-Law
To the authors’ knowledge, there are currently no court decisions that have provided in-depth analysis or discussion regarding the use of digital assets as collateral. However, both civil and criminal courts in Taiwan have generally recognised that digital assets possess property value, and therefore, theoretically, it is possible to create security interests over such assets. However, the legal characterisation of digi- tal assets under the Civil Code remains subject to debate. Some courts have classified digital assets as “things” while others have regarded them as “rights”. As a result, the specific methods for creating security interests over digital assets may depend on the future development of judicial practice. 1.2.2 Access to Banking Legally, there are no regulations prohibiting virtual- asset service providers (or any related businesses) from opening bank accounts or using other banking and payment services. In practice, however, the number of banks willing to open accounts for these providers is quite limited. This is often due to AML concerns or rather limited understanding of the industry players and the industry as a whole. 1.2.3 ESG/Sustainable Finance There are no legal/regulatory requirements regarding ESG/sustainable finance in Taiwan. In Taiwan, there is room for the issuance of security tokens under Taiwanese law, and although Taiwan has some ESG or perpetual-related disclosure regu- lations, these disclosure regulations are not applicable to security tokens. 1.2.4 Tax The tax regime has not been specifically amended to address blockchain technology or digital assets. As a result, the taxation of such assets is generally subject to interpretation under existing regulations. One major uncertainty arises when virtual assets are sold on local trading platforms, and the seller cannot provide documentation for the initial purchase cost. It becomes challenging to determine the taxable income derived from the transaction.
Also, the Ministry of Finance (MOF) has indicated that tax reporting obligations for virtual assets could be introduced once virtual-assets trading platforms and exchanges fully adopt real-name verification in accordance with the AML regulations applicable VASPs. As a result, regulatory measures concerning the taxation of virtual assets are expected to be imple- mented in the foreseeable future. 1.2.5 Insolvency Regarding the winding-up or insolvency of blockchain- related businesses, there are no laws and regulations that specifically address winding-up or insolvency requirements/regimes, nor are there any specific judi- cial precedents. Therefore, if a VASP goes bankrupt, the general bankruptcy law and company law regard- ing bankruptcy and liquidation will still apply. 1.2.6 Industry and Trade Bodies See 1.1.5 Industry and Trade Bodies . 2. Regulation 2.1 Regulators and International Alignment Currently, both security tokens and non-security tokens are under the supervision of the FSC. Spe- cifically, the FSC regulate over financial products and services, including those involving blockchain and digital assets. • Where digital assets deemed as securities, the FSC, through its Securities and Futures Bureau, enforces the provisions of the Securities and Exchange Act. Issuance and trading of such secu- rity tokens must comply with the requirements of the Act. The FSC has also authorised the Taipei Exchange (TPEx) to promulgate and implement specific regulations for STOs. • For digital assets without the nature of securities, currently the FSC regulates VASP primarily under the anti-money laundering framework. For non-security tokens in particular, because these are under the AML regime of the current framework, many of the systems being established are closely aligned with FATF standards. In November 2025, the Asia/Pacific Group on Money Laundering (APG) Mutu-
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