TMT 2025

TAIWAN Trends and Developments Contributed by: Jaclyn Tsai, Teresa Huang, Jaime Cheng and Lilian Hsu, Lee, Tsai & Partners

Introduction The progress of technology and changes in peo - ple’s lifestyles have led to the rapid growth of emerging technologies such as AI, cloud com - puting, IoT and blockchain, increasing the extent to which people depend on and are influenced by technology. While these advancements offer expanded opportunities in investment, con - sumption and entertainment, they also present challenges such as fraud and money laundering. In response, Taiwan has implemented regulatory measures to foster innovation while addressing risks. I. Regulation of Virtual Assets A. Taiwan’s virtual asset regulatory history and development Taiwan has adopted a gradual approach to regu - lating virtual asset service providers (VASPs). In addition to government departments, self-regu - latory organisations play a critical role in cultivat - ing a culture of compliance within the industry. Key developments are summarised below: (1) Phase 1: anti-money laundering (AML) regulation Since 2021, the Financial Supervisory Commis - sion (FSC) has enforced the “Regulations Gov - erning Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises Han - dling Virtual Currency Platform or Transaction” (“VASP AML Regulations”). These regulations mandate that VASPs complete AML declarations before providing virtual asset services and com - ply with regulations such as customer identifica - tion and transaction monitoring. As of 17 Janu - ary 2025, 23 VASPs in Taiwan have completed their AML declarations.

(2) Phase 2: promoting VASP to establish an association and developing self-regulatory codes In 2023, the FSC issued the “Guidelines for the Administration of Virtual Asset Service Provid - er” (“VASP Guidelines”), which required VASPs to establish an association. With the support of the FSC, the Taiwan VASP Association was established in June 2024 (“Association”). From November 2024 to January 2025, the Associa - tion issued seven self-regulatory codes covering issues such as virtual asset listing and delisting review, customer protection, anti-money laun - dering, fraud prevention, cybersecurity manage - ment, and asset segregation and safekeeping. (3) Phase 3: establishment of VASP registration regime In accordance with Article 6 of the Money Laundering Control Act and the “Anti-Money Laundering Registration Regulations for Virtual Asset Service Providers” (“VASP Registration Regulations”), effective from 30 November 2024, VASPs must complete AML registration with the FSC before they can legally provide virtual asset services in Taiwan. Failure to comply will result in criminal liability, with penalties including up to two years of imprisonment and a fine of up to TWD5 million for individuals, and fines of up to TWD50 million for entities. It is important to note that while the registration regime is structured under the anti-money laundering framework, its substantive content also covers crucial issues such as protection of clients’ assets and main - tenance of market discipline. For detailed regu - latory content, please refer to the section “I.B. Current Regulations for VASPs”. (4) Phase 4: development of a VASP-specific law Starting with anti-money laundering meas - ures, Taiwan has gradually implemented a

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