FSC reiterates: Regulations for "Regulated Virtual Asset Trading Platform Operators" will be launched in September this year to enhance the ability to combat fraud.

"We will continue to regulate virtual asset trading platform operators, and the relevant measures will be announced in September this year," said Tong Zhengzhang, Deputy Director of the Banking Bureau of the Financial Supervisory Commission, at the Executive Yuan press conference on May 4. Watch the video at 21:58.

In fact, the "September announcement of regulations for banks to buy and sell cryptocurrencies" is not as rumored outside.

Financial Supervisory Commission Cracks Down on imB and Other Frauds, Calls for Cooperation from Virtual Asset Exchanges

Recently, the imB lending platform fraud incident has caused quite a stir. Following a press conference on May 4 after the Executive Yuan meeting, measures to combat fraud were once again emphasized. The Financial Supervisory Commission (FSC) expressed its policy measures to "prevent fraudulent fund flows" within its scope of business, version 1.5:

1. Require financial institutions to control mechanisms for requested transfer agreements
2. Incorporate virtual asset trading platform operators, with related regulations to be announced in September this year. Note: This does not pertain to the "regulation of banks trading cryptocurrencies"
3. Amend the regulations for securities investment consulting to address false online investment advertisements
4. Continue to supervise game point operators in conjunction with the National Communications Commission to establish internal control mechanisms to prevent fraud
5. Urge third-party payment operators to implement real-name systems
6. Convene a financial industry summit to combat fraud

Spokesperson for the Executive Yuan, Lo Ping-cheng, stated that despite a significant reduction in fraudulent fund flows amounting to over 4.2 billion NTD last year, additional measures to minimize damage are necessary. This is because many fraudulent fund flows are conducted through game points and virtual currencies for fraud purposes 14:50.

Ministry of Justice to Intensify Investigation of Fund Flows, Taiwan's Banking Industry Premature for Cryptocurrency Trading

For advocates of cryptocurrency, it would be a cause for celebration if Taiwan's banking industry could engage in compliant cryptocurrency trading. However, the high level of concealment and circulation of cryptocurrencies, or as officially termed in Taiwan, virtual currencies, has become a headache for law enforcement agencies.

At a press conference after the Executive Yuan meeting on May 4, Huang Mou-xin, Deputy Director-General of the Ministry of Justice, stated 27:20:

"Of course, we have also dealt with the issue of virtual currencies. We hope to optimize the investigation, retrieval, freezing, and seizure mechanisms for virtual currencies."

"We aim to enhance the investigation of virtual currencies and fund flows."

Huang Mou-xin mentioned that the Taiwan High Prosecutors Office has established an Anti-Fraud and Information Communication Crime Supervision Center, collaborating with the Investigation Bureau's Anti-Fraud Center and the policing centers in the north, central, and south regions to increase investigative capabilities through organizational expansion.

What Does the September "Regulation of Virtual Asset Trading Platform Operators" Entail?

If it is not the rumored "September announcement of regulations for banks trading cryptocurrencies," then what does the upcoming "Regulation of Virtual Asset Trading Platform Operators" entail?

According to a press conference by the Financial Supervisory Commission in March, Vice Chairperson Shu-ching Chiu stated that as the regulatory authority for virtual assets, the FSC will establish guiding principles for virtual assets and invite industry operators to promote industry self-regulation through the formation of a "guild." However, the FSC currently has no plans to enact relevant laws or license virtual assets as a regulated industry. The security of the industry primarily relies on owners' "self-discipline" and "mutual constraints."

The guiding principles will include:

• Information disclosure
• Anti-money laundering
• Product review procedures for onboarding and delisting
• Fairness and transparency in trading
• Protection of customer and consumer rights
• Operation system and management of hot and cold wallets
• Separate custody of assets between customers and platform operators

For more information on the September regulation of virtual asset trading platform operators, please see: Not a regulated industry, no regulations enacted, relying on "guild" self-restraint

However, with the Executive Yuan's bold declaration of the 1.5 anti-fraud policy, whether the upcoming "Regulation of Virtual Asset Trading Platform Operators" guiding principles to be released in September will include stricter regulations remains to be seen.

One thing that can be certain is that those anticipating the "September announcement of regulations for banks trading cryptocurrencies" to facilitate compliant trading of cryptocurrencies by banks may be disappointed.