TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
Regarding cryptocurrency trading, security tokens can only be traded by licensed securities dealers in accordance with the STO regulations. However, for cryptocurrencies that do not possess the character - istics of securities, crypto exchanges or trading plat - forms must comply with the Crypto AML Regulations, as mentioned in 2.14 Impact of AML and Sanctions Rules . 6.2 Regulation of Different Asset Classes Please see 6.1 Permissible Trading Platforms . 6.3 Impact of the Emergence of Cryptocurrency Exchanges As specified in 2.2 Regulatory Regime , 2.14 Impact of AML and Sanctions Rules and 6.1 Permissible Trading Platforms , assuming no STOs are involved, crypto exchanges are subject to the Crypto AML Reg - istration Regulations and the Crypto AML Regulations, while STOs should follow STO regulations (please see 10.4 Regulation of “Issuers” of Blockchain Assets ). It is crucial to be aware that, in response to FTX’s insol - vency as well as certain reported defrauding activities in Taiwan, the FSC introduced a set of guidelines for VASPs under the Taiwan AML Act in September 2023 (“VASP Guidelines”). These guidelines encompass various aspects, including (i) the responsibilities that an issuer must fulfil when issuing virtual assets, such as announcing the “whitepaper” on its website; (ii) the mechanism by which a VASP reviews the launch of virtual assets; (iii) the safekeeping and separation of assets belonging to the VASP and its customers; (iv) ensuring that transactions are conducted in a fair and transparent manner; (v) the management system for operations, information security and wallets (cold and hot); (vi) disclosing relevant information to the public; (vii) implementing internal controls and conducting audits; and (viii) the extent to which these guidelines apply to VASPs operating from outside Taiwan. While these guidelines do not carry the force of “hard law”, there is a general expectation that the FSC will pro - gressively mandate compliance with these rules. Also, as specified in 2.14 Impact of AML and Sanc- tions Rules , VASPs fall within the regulatory regime of the Taiwan AML Act, and VASPs operating without
Crypto AML Registration may be subject to criminal liability. Moreover, according to related news coverage, the FSC is contemplating the possibility of introducing a crypto-specific law, with a draft announced in June 2025. Industry participants are advised to closely monitor the prospective regulatory changes in Taiwan. 6.4 Listing Standards Please see 10.4 Regulation of “Issuers” of Block- chain Assets for certain regulations regarding listing of security tokens and non-security tokens. 6.5 Order Handling Rules For Security Tokens The STO regulations provide for the following trading rules, which may be relevant to order handling: • A securities firm (ie, platform operator) shall adopt rules for the negotiated trading of security tokens and KYC procedures, and publish them on its trad - ing platform and incorporate them into its internal control system. Such negotiated trading rules shall include the trading platform’s business days and trading hours, price quote method, trade execution principles, price stabilisation mechanism, trading procedures, method for the advance collection of purchase prices and security tokens to be sold, and the handling of settlement and default. • The price quotes provided by the securities firm are nominal quotes, and the securities firm shall pro - vide two-way (buy and sell) quotes. The trade price shall be negotiated between the securities firm and the customer. • A securities firm shall provide reasonable price quotes based on its professional judgement, and shall efficiently adjust demand and supply in the market depending on the market situation, and may not give a quote that deviates from a reason - able price, thereby impairing the formation of fair prices. • When making price quotations for and engaging in negotiated trading of security tokens that the secu - rities firm issued itself, the securities firm shall pay special attention to reasonableness of price, and shall adopt in its internal control system a basis for
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