Taiwan To Introduce Strict Crypto Penalties To Crackdown On Unlicensed And Fraudulent Activity

bitcoinistОпубліковано о 2026-04-04Востаннє оновлено о 2026-04-04

Анотація

Taiwan's Executive Yuan has approved a draft of the Virtual Asset Service Act (VASA), introducing strict regulations and severe consequences for unlicensed or fraudulent crypto activities. The legislation imposes prison sentences of up to 10 years and fines as high as $6.25 million for offenses like market manipulation. Unlicensed stablecoin issuance could result in 7-year prison terms and fines up to $3.13 million. The new rules also prohibit stablecoin issuers from paying interest to holders and require robust internal controls. The regulatory framework, developed by the Financial Supervisory Commission, includes a phased implementation approach and aims to enhance transaction security while supporting financial innovation.

Taiwanese authorities have approved a new draft of their crucial crypto legislation, introducing severe penalties for unlicensed or fraudulent activities related to stablecoins and other digital assets.

Taiwan Approves $6M Fines To Combat Crypto Fraud

On Friday, local news outlets reported that the Executive Yuan passed the draft of the Virtual Asset Service Act (VASA) on April 2, marking a major step to regulate crypto assets in Taiwan.

The VASA, introduced by the Financial Supervisory Commission (FSC) last year, supports the efforts by Taiwanese authorities to establish a comprehensive crypto framework for Virtual Asset Service Providers (VASPs) and stablecoin issuers.

In 2024, the FSC overhauled its Anti-Money Laundering (AML) framework to include crypto businesses, adding stricter AML guidelines for VASPs and requiring all digital asset firms to complete the AML registration by September 2025.

Premier Cho Jung-tai explained that the new framework, which will be implemented in four gradual phases, includes industry self-regulation and an AML compliance registration system. The measures aim to enhance the security of virtual asset transactions, pilot custody services, and support the growth of domestic financial innovation, he added.

According to the reports, the draft requires VASPs to operate exclusively in this field and meet specific standards for their company name, organizational structure, and capital. Financial institutions can also operate VASP services in addition to their other businesses, if approved.

In addition, special regulations would be customized to suit the nature of each service provider. For instance, trading platforms would be required to establish clear guidelines for listing and delisting virtual assets.

The draft also includes heavy penalties for unlicensed and fraudulent activities, with offences involving crypto falsification, concealment, or price manipulation risking 3-10 years in prison and fines of up to NTD 200 million, worth $6.25 million.

Meanwhile, firms that issue stablecoins without a license could face up to seven years in prison and fines of up to NTD 100 million, or about $3.13 million, according to the draft.

New Stablecoin Regulations To Prohibit Interest Payments

Officials outlined the main differences between the recently passed VASA draft and the FSC’s original text regarding stablecoin guidelines, which include issuance and redemption regulations, restrictions on interest or returns, and internal control and cybersecurity management.

Under the new draft, the issuance and redemption of stablecoins must be conducted at face value, and issuers may not refuse redemption requests from holders. Issuers are also prohibited from paying interest or returns to holders on the stablecoins they issue, aligning with international trends.

Lastly, issuers must establish and maintain robust internal control and audit systems, along with information security management mechanisms, to ensure the proper issuance and redemption of stablecoins.

FSC Deputy Chairman Chen Yen-liang asserted that stablecoin issuance is not currently limited to banks, but noted that the financial institutions are “generally better positioned to meet the relevant requirements” due to their capital strength and risk management capabilities.

For other operators, different capital thresholds and operating guarantee requirements would be set based on the nature of their business, with further details to be announced after the legislation officially passes.

In December, FSC Chairman Peng Jin-long revealed that the island’s first regulated stablecoin could debut this year. As reported by Bitcoinist, stablecoin-centered regulations would be developed within six months after the VASA’s approval, setting the launch of locally issued tokens pegged to the NTD or the USD to the second half of 2026.

Deputy Chairman Chen added that the regulator would adopt a “gradual opening” model, and relevant regulations would be developed by authorities alongside the Central Bank.

The total crypto market capitalization is at $2.29 trillion on the one-week chart. Source: TOTAL on TradingView

Пов'язані питання

QWhat is the name of the new crypto legislation draft approved by Taiwanese authorities and what is its main purpose?

AThe new crypto legislation draft is called the Virtual Asset Service Act (VASA). Its main purpose is to regulate crypto assets by introducing severe penalties for unlicensed or fraudulent activities related to stablecoins and other digital assets, and to establish a comprehensive framework for Virtual Asset Service Providers (VASPs) and stablecoin issuers.

QWhat are the potential penalties for offences involving crypto falsification, concealment, or price manipulation under the new draft?

AOffences involving crypto falsification, concealment, or price manipulation risk 3-10 years in prison and fines of up to NTD 200 million, which is worth approximately $6.25 million.

QWhat specific restrictions does the new draft place on stablecoin issuers regarding interest payments and redemptions?

AThe new draft prohibits stablecoin issuers from paying interest or returns to holders on the stablecoins they issue. It also requires that the issuance and redemption of stablecoins must be conducted at face value, and issuers may not refuse redemption requests from holders.

QBy what date are all digital asset firms required to complete their Anti-Money Laundering (AML) registration in Taiwan?

AAll digital asset firms are required to complete their Anti-Money Laundering (AML) registration by September 2025.

QAccording to the FSC Deputy Chairman, why are financial institutions better positioned to meet the requirements for stablecoin issuance?

AFSC Deputy Chairman Chen Yen-liang stated that financial institutions are 'generally better positioned to meet the relevant requirements' due to their capital strength and risk management capabilities.

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