Taiwan Passes Comprehensive Crypto Law Requiring Licenses, Reserves and Stricter Penalties

Taiwan’s Legislative Yuan has passed the Virtual Asset Service Act, sending the legislation to President Lai Ching-te for signing within the next ten days. The law requires all cryptocurrency exchanges and virtual asset service providers to obtain explicit licensing from the Financial Supervisory Commission before operating legally in the country.

Tougher Standards Across Operations and Custody

The rules introduce stricter cybersecurity requirements, mandatory separation of customer and company funds, and stronger internal governance standards. Platforms already registered for anti-money laundering compliance will receive a 12-month window to apply for licenses and up to 21 months to secure full approval.

Stablecoin Issuers Face Dual Regulatory Approval

Stablecoin businesses must obtain sign off from both the central bank and the FSC while maintaining 100% asset reserves at all times, setting a notably high bar compared to other jurisdictions.

Serious Criminal Penalties for Violations

Unauthorized platform operation carries up to seven years in prison and fines reaching NT$100 million. Market manipulation offenses face even heavier consequences, including three to ten years imprisonment and fines up to NT$200 million.