Taiwan’s financial watchdog on Tuesday published guiding principles for crypto issuers and firms as it looks to strengthen industry oversight.
The Financial Supervisory Commission (FSC), which was in March confirmed to be supervising the sector, said its guiding principles are meant to strengthen customer protection by ensuring transparency, sound asset custody methods, and reinforcing firms’ internal controls and management.
Under the new guidance, crypto issuers would have to publish a white paper, and exchange platforms must set up a review mechanism for listing and delisting virtual assets. Among other requirements, the regulator said firms should also custody platform assets and customer assets separately. Overseas firms will have to register locally in accordance with company and anti-money laundering laws before serving customers.
Crypto regulation is intensifying globally following the spectacular market collapse of 2022, with added scrutiny on how firms custody clients’ assets after court filings in crypto exchange FTX’s bankruptcy proceedings revealed customer funds may have been mixed up with company assets.
The FSC referred to new crypto regulations from the European Union, Japan and South Korea in strengthening its own frameworks, according to a press release on the guidance publication.
Industry and self-regulatory bodies will have to set up norms based on the new guiding principles to further enhance customer protection, the FSC said.