The Financial Supervisory Commission (FSC) in Taiwan has issued guidelines for cryptocurrency service providers and exchanges following the collapse of the FTX exchange last year.
The FSC wants to establish a self-regulating mechanism for service providers that enables the industry to monitor its own legal, ethical, and security standards.
The guidelines include information disclosure, asset separation, money laundering prevention, promoting institutional auditing, managing hot and cold wallets, and protecting consumers’ interests.
The FSC’s regulatory approach should allow the local crypto sector room for further development and innovation.
However, if the guidelines are too cumbersome, they may stifle the development of Taiwan’s crypto sector and push local investors toward offshore platforms.
The FSC needs to reserve the power to inspect domestic crypto platforms and establish a mechanism for consumer protection.
At the same time, it must ask foreign firms to comply with Taiwans consumer protection and financial regulations. Finally, the FSC must review and adjust its regulatory measures on a rolling basis to ensure the sector’s long-term development.