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No Taiwanese law or regulation has been specifically promulgated or amended to formally regulate digital assets, cryptoassets or their marketplaces, except for certain rulings and regulations governing security tokens (i.e., security token offering (STO) rules as explained below) and anti-money laundering (as explained below).1
Despite the fact that the current regulatory regime of Taiwan does not impose any restrictions or prohibitions on owning or possessing cryptoassets that are not securities or any other financial product or service, STO rules (as defined below) govern the issuing, trading and possession of security tokens.1
Currently, only 'professional investors' are eligible for STOs; where the professional investor is a natural person, the maximum subscription amount is NT$300,000 per STO. However, the FSC announced in January 2022 (the 2022 press release) that it would expand the scope of eligible investors to foreign persons as part of the STO rules.1
It is the platform operator's responsibility to ensure that the issuer meets the relevant qualifications and that the prospectus is well prepared when conducting STOs on a single platform. In cases where the platform operator itself is an STO issuer, an issuer should not launch an STO without TPEx reviewing it first.1
Trading should be handled by the platform operator by way of price negotiation, which requires obtaining a securities dealer license. Platform operators should act as counterparties in every transaction and offer a reasonable reference quotation based on market conditions. Furthermore, each security token can only be traded on one platform under an STO program.1
The maximum amount a professional investor can hold under an STO programme is NT$300,000. Additionally, the maximum daily transaction limit for each STO is 50% of the total issuance amount.1
Platform operators are required to obtain a securities dealer license, have NT$100 million in paid-in capital, and provide a NT$10 million operation bond.1
An executive order issued by the Taiwan Cabinet on 7 April 2021 refers to 'cryptoasset trading platforms and related transaction businesses' that use 'cryptography, distributed ledger technology, or other similar technologies that can be digitally stored, exchanged, or transferred, and can be used for payment or investment purposes' to conduct any of the following services:
On 22 June 2021, the FSC published the Regulations Governing Anti-Money Laundering and Countering Terrorist Financing for Cryptoasset Platforms and Trading Businesses (the AML Regulations). In accordance with the AML Regulations, operators that provide the above-mentioned services are required to establish internal control and audit mechanisms, a reporting procedure for suspicious transactions, and a know-your-customer program.1
Lately, the expansion of blockchain technology and the rise in metaverse trends have created a stir in Taiwan's market. A metaverse is an advanced virtual world, accessed through technologies such as augmented reality, virtual reality or mobile devices. It is viewed as a foundation for NFTs. Despite a great deal of discussion and advancement related to this topic, Taiwanese regulations remain absent, presenting no legal foundation for the development of the metaverse.1
