TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
related FSC press releases, multiple TSPs were grant - ed approval to collaborate with certain banks during this phase. Phase III, which commenced in January 2024, focuses on transaction-related information. The scope of Phase III encompasses businesses/services in respect of deposits, credit cards, loans, payments, and remittances via mobile phone numbers. Accord - ing to a FSC report, a total of two banks and one TSP participated in Phase III, with two co-operative pro - jects approved by the FSC. The main services offered are deposits and payments. 11.2 Concerns Raised by Open Banking Any open banking project, if it involves transfer of per - sonal data, is subject to the PDPA. Please see 2.11 Implications of Additional, Non-Financial Services Regulations . As regards data security, any project is required to follow the self-regulatory rules set out by the Bankers Association as well as the rules and security stand - ards of the FISC, as specified in 11.1 Regulation of Open Banking . In Taiwan, criminal fraud typically occurs when an actor intentionally carries out fraudulent activities, leading victims to give away their belongings/proper - ties. 12.2 Areas of Regulatory Focus In the context of fintech, fraud may occur in circum - stances such as (1) general fraud involving payment methods or cryptocurrency used during criminal activ - ities (eg, used for payments resulting from fraudulent schemes) and (2) illegal fundraising associated with cryptocurrency, where the token issuer provides investors with misleading or false information that misrepresents the rights and interests in the tokens being issued. 12. Fraud 12.1 Elements of Fraud
Due to the rampant proliferation of fraud, the Legisla - tive Yuan passed the Fraud Crime Harm Prevention Act in 2024, imposing relevant obligations on certain types of financial institutions and VASPs, including but not limited to: (1) strengthening KYC procedures for abnormal accounts suspected of involvement in fraud crimes, with the right to suspend all or part of the transaction functions and to report to the judicial police authorities; (2) co-operating with judicial police authorities to establish a joint prevention and reporting mechanism; and (3) stipulating that, under certain cir - cumstances, amounts or assets defrauded from vic - tims but not yet withdrawn may be returned. Towards the end of 2025, amendments were made to this Act, including a provision that joint prevention and report - ing must, in future, be conducted not only among the service providers of the same types of businesses but also across different types of businesses. 12.3 Responsibility for Losses The responsibility for a loss suffered by a customer depends on the business model and specific circum - stances. However, the greater the extent to which the loss can be attributed to the fintech service provider – such as due to gross negligence or even ordinary negligence – the more likely it is that the service pro - vider will be held accountable for the loss. Please note that the Fraud Crime Harm Prevention Act also specifically provides that financial institutions and VASPs, when implementing anti-fraud measures as stipulated in this Act, or co-operating with the judicial police or the respective competent authorities in their handling, shall be exempt from liability for compen - sation for any damages caused to customers or third parties.
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