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

step-by-step regulatory approach for VASPs, accompanied by the establishment of self-reg - ulatory organisations and communication with the industry. The Taiwan government further strengthened its control over VASPs by creating the registration system. In line with these efforts, the FSC plans to submit a draft VASP-specific law to the Executive Yuan in June 2025, which will further regulate VASP-related issues. B. Current regulations for VASPs VASPs must comply with the following main regulations, including the VASP Registration Regulations, the VASP AML Regulations, the Fraud Crime Hazard Prevention Act (FCHPA) and self-regulatory codes. The key points are outlined as follows: (1) VASP Registration Regulations The VASP Registration Regulations categorise VASPs into five types: Virtual Asset Exchang - ers, Virtual Asset Trading Platforms, Virtual Asset Transferors, Virtual Asset Custodians and Vir - tual Asset Underwriters. In addition to general requirements for all VASPs, the VASP Registra - tion Regulations also impose different legal obli - gations based on the type of service provided by different VASPs. Specifically, all VASPs are required to: • ensure that their business operations and virtual assets related to their services comply with applicable laws, article of association, internal control systems and self-regulatory codes; • establish appropriate systems for cyberse - curity management and handling customer complaints; • fulfil information disclosure and record-keep - ing obligations; and

• if their business involves the receipt or pay - ment of fiat currencies, adopt measures to protect clients’ assets, which include, but are not limited to, trust arrangements for fiat cur - rency or obtaining full performance guaran - tees from banks. Additionally, VASPs are required to comply with specific regulations depending on the services they provide. For example, Virtual Asset Trading Platforms must comply with the following key requirements: • Develop standards and procedures for reviewing the listing and delisting of virtual assets. • Develop and announce trading rules for vir - tual assets. • Implement mechanisms to prevent unfair market transactions and detect abnormal trading volumes and prices. (2) AML regulations and enforcement To combat money laundering and terrorist financing (AML/CFT), VASPs must comply with several key regulations, including but not limited to: • Conducting customer due diligence (CDD) when establishing business relationships, when suspicious transactions are identified, or when required by law. • Refusing to establish business relationships or engage in transactions with suspicious customers. • Continuously monitoring and maintaining records of customer transactions. • Reporting suspected large, suspicious or obviously emergent transactions related to money laundering or terrorism financing to the Ministry of Justice Investigation Bureau.

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