Taiwan Slaps Strict Crypto Regulations with Jail Time and $3.1 Million Fines

Taiwan has become the latest jurisdiction to introduce comprehensive regulations for virtual assets. On June 30, the island's legislature approved the Virtual Asset Service Act, which designates the Financial Supervisory Commission (FSC) as the sole regulator and imposes strict licensing and operational requirements on providers.

The law requires exchanges, custodians, and wallet operators to obtain FSC approval and meet standards for internal controls, cybersecurity, and business continuity. Providers must secure separate licenses across seven categories: exchange, trading platform, transfer, custody, underwriting, lending, and others.

Roughly 8 incumbents will have 12 months to apply for licenses after the law takes effect in early 2027, with an additional 21 months to obtain certification. Failing to comply can result in up to 7 years in prison and fines of up to $3.1 million (NT$100 million).

The Virtual Asset Service Provider Association has pledged to assist firms through implementing rules covering establishment, personnel management, internal controls, abnormal-transaction monitoring, outsourcing, and financial-statement preparation.