TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
1. Fintech Market 1.1 Evolution of the Fintech Market Cryptocurrency Due to the insolvency of FTX, as well as cer - tain reported defrauding activities in Taiwan, the Financial Supervisory Commission (FSC) introduced a set of guidelines for virtual asset service providers (VASPs) under the Money Laundering Control Act (the “Taiwan AML Act” ) in September 2023. Further, in 2024, Taiwan’s AML Act was amended, and under the revised Act, VASPs operating without registration with the FSC for AML purposes could face criminal liability. Moreover, based on related news cover - age, the FSC is contemplating the possibility of introducing a crypto-specific law, with a poten - tial draft scheduled for announcement around June 2025. Please see 2.14 Impact of AML and Sanctions Rules and 6.3 Impact of the Emer- gence of Cryptocurrency Exchanges for further information. AI In the financial industry, the FSC rolled out the “Core Principles and Related Promotion Poli- cies for the Use of Artificial Intelligence (AI) by the Financial Industry” in October 2023. Then, in June 2024, the FSC introduced the “Guide- lines for the Use of Artificial Intelligence (AI) in the Financial Industry” . These guidelines, serving as administrative guidance, aim to help financial institutions implement, manage and oversee AI technologies effectively. The guidelines cover key areas such as: (1) establishing governance and accountability structures, (2) ensuring fair - ness and prioritising human-centred values, (3) safeguarding privacy and customer rights, (4) ensuring system security and robustness, (5) promoting transparency and explainability, and (6) fostering sustainable development.
In July 2024, the National Science and Tech - nology Council (NSTC) released a draft version of the “Basic Act for Artificial Intelligence” (the “Draft AI Act” ). The Draft AI Act does not set specific regulatory requirements for AI, but out - lines the responsibility of the Ministry of Digital Affairs (MODA) to create an AI risk classification framework aligned with international standards. Under such framework, relevant regulatory bod - ies, such as the FSC for the financial sector, may introduce industry-specific risk classification regulations. It is important to closely follow the development of this AI legislation as it advances through the legislative process. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models Commonly observed fintech applications in Taiwan include peer-to-peer lending, electronic payment solutions, robo-advisers and crypto - currencies. 2.2 Regulatory Regime Please see below a brief introduction to the reg - ulatory regimes applicable to certain commonly seen fintech applications: Peer-to-Peer Lending As of the time of writing, there are no specific laws or regulations governing peer-to-peer lend - ing in Taiwan. However, the Bankers Associa - tion has introduced the “Self-Disciplinary Rules of Business Co-operation Between Member Banks of the Bankers Association and Peer-to- Peer Lending Operators” . These rules, filed with the FSC, outline areas in which banks can col -
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