TMT 2025

TAIWAN Law and Practice Contributed by: Jaclyn Tsai, Aaron Chen, Teresa Huang and Jaime Cheng, Lee, Tsai & Partners

With the above regulatory approach, 2024 was a particularly impactful year for the crypto industry in Taiwan. Key regulations in 2024 are as follows. Implementation of the VASP registration regime The Anti-Money Laundering Registration Regu - lations for VASP (“VASP Registration Regula - tion”) became effective on 30 November 2024. VASPs that have not completed AML registra - tion as of 30 November 2024 are prohibited from providing virtual asset services. Non-compliance may result in penalties, including imprisonment of up to two years for individuals and/or fines up to TWD50 million for entities. VASPs that completed AML declarations before 30 November 2024 must still apply for and com - plete their AML registration by 30 September 2025. VASPs that fail to do so will be prohibited from conducting virtual asset operations. Differentiated legal compliance obligations for VASPs Under the VASP Registration Regulation, VASPs are classified into five categories: Virtual Asset Exchangers, Virtual Asset Trading Platforms, Vir - tual Asset Transferors, Virtual Asset Custodians and Virtual Asset Underwriters. While the VASP Registration Regulation requires general compli - ance for all VASPs, differentiated legal obliga - tions are provided based on the nature of their services. The key points include: • VASPs must develop and announce rules for the virtual assets services they operate. For example, Virtual Asset Trading Platforms must establish review standards and procedures for listing or delisting virtual assets. • VASPs must implement measures to protect customers’ assets when holding their funds or virtual assets.

• A customer complaint resolution procedure must be established. • VASPs must ensure appropriate cybersecurity management. VASPs’ anti-fraud obligations Under the Fraud Crime Hazard Prevention Act announced in July 2024, VASPs are obligated to co-operate with law enforcement agencies in establishing a reporting system and freezing suspected funds or virtual assets for anti-fraud purposes. Violations of these obligations may result in a fine ranging from TWD200,000 to TWD2 million; in serious cases, the fine will be from TWD1 million to TWD10 million. VASPs are obligated to join the VASP Association and comply with self-regulatory codes The Taiwan VASP Association was officially established in June 2024. According to the VASP Registration Regulation, VASPs must join the VASP Association before operating virtual asset businesses, and adhere to the self-regu - latory codes set forth by the VASP Association. The VASP Association has released seven self- regulatory codes, covering virtual asset listing/ delisting reviews, customer protection and anti- money laundering. The FSC has announced plans to submit a draft of a dedicated virtual asset law to the Executive Yuan by June 2025. Relevant businesses should closely monitor the latest regulatory develop - ments.

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