Taiwan

## Report on Retail_Trading_Status in Taiwan

**Date:** 2025-06-26

**Topic:** Retail_Trading_Status

**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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**1. Identified Current Status:** Allowed-Regulated

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**2. Detailed Narrative Explanation:**

Individual citizens and residents in Taiwan are legally permitted to buy, sell, and hold cryptocurrencies. However, this activity is subject to a developing regulatory framework, primarily focused on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) requirements for Virtual Asset Service Providers (VASPs). While cryptocurrencies are not considered legal tender or "currency" by the Central Bank of the Republic of China (Taiwan) and the Financial Supervisory Commission (FSC), they are viewed as highly speculative digital "virtual commodities".

Historically, Taiwanese authorities initially adopted a cautious stance. In 2013, the CBC and FSC issued a joint press release clarifying that Bitcoin is not a currency but a virtual commodity. In 2014, the FSC prohibited local banks from accepting Bitcoin or providing Bitcoin-related services. This cautious approach aimed to minimize risks to the financial system while allowing the nascent crypto market to develop.

The regulatory landscape has been evolving, with a significant focus on bringing VASPs under the purview of AML laws. The Money Laundering Control Act was amended to include VASPs, requiring them to comply with AML/CFT obligations similar to those for financial institutions. This includes implementing Know Your Customer (KYC) procedures, record-keeping, and reporting suspicious transactions.

Starting November 30, 2024, VASPs, including cryptocurrency exchanges, are required to register with the FSC for AML compliance. Failure to register can lead to significant penalties, including fines and imprisonment. Foreign VASPs intending to operate in Taiwan must establish a local presence and complete this AML registration.

The FSC has also issued "Guidelines for Virtual Asset Service Providers (VASP Guidelines)" in September 2023. While not initially binding from a purely legal standpoint, these guidelines cover broader aspects beyond AML, including consumer protection and operational requirements, and there's an expectation that compliance will gradually become mandatory.

Furthermore, Taiwan is actively working on a dedicated "Virtual Asset Management Act" or "Special Law for Crypto Exchange Management." Draft versions of this legislation have been introduced, aiming to establish a comprehensive licensing regime for VASPs, moving beyond the current AML registration system. This new law is expected to cover aspects like minimum capital requirements, consumer protection, segregation of customer assets, and information transparency. The FSC anticipates unveiling a draft to lawmakers around June 2025.

Regarding taxation, income from cryptocurrency transactions is subject to existing tax laws. The Ministry of Finance has clarified that profits from trading virtual currencies considered to be of a securities nature are treated as "securities trading profits and losses." For other crypto transactions, individual investors must report gains as property transaction income.

While retail trading is permitted and regulated primarily through AML/CFT measures for VASPs, the FSC has issued warnings about the speculative nature and risks associated with cryptocurrencies. Additionally, credit card services for the purchase of crypto-assets have been banned. The focus remains on investor protection and financial stability as the regulatory framework continues to mature.

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**3. Specific, Relevant Text Excerpts:**

*   **Global Legal Insights (2024-10-25):** "As for AML, the Money Laundering Control Act of Taiwan (“Taiwan AML Act”) has brought cryptocurrency platform operators into the AML regulatory regime, under which the enterprises falling within the designated scope will be subject to the relevant rules applicable to financial institutions under the Taiwan AML Act."
*   **Global Legal Insights (2024-10-25):** "Under such amendment, such crypto-related service providers (VASPs) shall complete the “Anti-Money Laundering Registration” with the FSC before they may provide the services, and any offshore VASPs shall set up a company or branch office in accordance with the Company Act and complete the aforementioned Registration before providing relevant services within Taiwan."
*   **Global Legal Insights (2024-10-25):** "Furthermore, the FSC is considering the possibility of introducing a specific law for cryptocurrencies, with a potential report on feasibility study expected to be announced around the end of 2024 and the draft law around June or July of 2025."
*   **Law Over Borders - The Global Legal Post:** "For cryptoassets that are not considered to be securities or any other financial products or services, the current regulatory regime imposes no restrictions or prohibitions on their ownership or possession, their use in commercial transactions and their exchange for fiat currency in Taiwan."
*   **Law.asia (2025-05-14):** "As long as no security tokens are involved, there are no laws or regulations specifically dealing with the trading of cryptocurrencies – so no licence is required for operating crypto platforms/exchanges. However, the Money Laundering Control Act (AML Act), the main law governing anti-money laundering, enmeshes VASPs into Taiwan's AML regulatory regime."
*   **Law.asia (2025-05-14):** "In 2024, the FSC introduced new rules under the AML Act requiring VASPs to register with the FSC before offering any virtual asset-related services such as operating exchanges, trading platforms, transfer services, custodial services or underwriting activities. Failure to register may result in criminal penalties, including imprisonment for up to two years, fines of up to NTD5 million, or both."
*   **Taiwan News (via Digital Watch Observatory, 2024-10-31):** "Taiwan is moving towards stricter oversight of the crypto sector, with the Financial Supervisory Commission (FSC) set to introduce a registration system for crypto exchanges on 30 November."
*   **Taiwan Tiptoes Toward Tougher Digital Asset Rules (2025-03-24):** "On February 2, Taiwanese media reported that the FSC will unveil draft legislation for the cryptocurrency industry in March. This legislation will build on existing anti-money laundering (AML) rules that came into effect in November 2024. While the details are still being fleshed out, the legislation is likely to require that digital asset services providers, which Taiwan refers to as virtual asset service providers (VASPs), secure permits within 15 months of the legislation's promulgation."
*   **Authme (2024-12-25):** "As of November 30, 2024, VASPs are required to apply for AML registration with the FSC in accordance with the Anti-Money Laundering Act. Only upon successful registration can they legally provide virtual asset services."
*   **Taipei Times (2025-06-13):** "The Financial Supervisory Commission (FSC) yesterday previewed a bill that would punish illegal activities linked to cryptocurrencies with steep penalties ranging from fines to prison sentences. The government is drafting a bill to prevent the use of virtual assets in fraud, market manipulation, money laundering and terrorism, the FSC said in a report to the Legislative Yuan... The government is taking steps to help the private sector organize a virtual assets industry association to promote self-regulation, it said, adding that it would also implement a licensing scheme for traders, platforms, transferors, custodians and underwriters."

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**4. Direct, Accessible URL Links to Sources:**

*   Global Legal Insights - Blockchain & Cryptocurrency Laws & Regulations 2025 | Taiwan: https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/taiwan (Note: While the link title says 2025, the content indicates an update on 2024-10-25. The information regarding the draft law in 2025 is a forward-looking statement within that 2024 content.)
*   Crystal Intelligence - Taiwan's Crypto Market & Regulations: https://crystalblockchain.com/news-and-resources/country-guides/taiwan-crypto-market-and-regulations/
*   Law Over Borders - The Global Legal Post - Taiwan - Cryptoassets: https://www.globallegalpost.com/practice-areas/law-over-borders-comparative-guides/global/cryptoassets-732311/taiwan-732361/
*   Law.asia - Bumpy road to navigating Taiwan's crypto conundrum: https://law.asia/bumpy-road-navigating-taiwans-crypto-conundrum/
*   Digital Watch Observatory - Crypto exchanges in Taiwan to register under new rules: https://dig.watch/updates/crypto-exchanges-in-taiwan-to-register-under-new-rules
*   Taiwan Business TOPICS - Taiwan Tiptoes Toward Tougher Digital Asset Rules: https://topics.amcham.com.tw/2024/03/taiwan-tiptoes-toward-tougher-digital-asset-rules/ (Refers to a March 2025 announcement for draft legislation, aligning with other sources pointing to mid-2025 for the draft law.)
*   Regulated United Europe - Crypto in Taiwan: https://rue.ee/en/news/crypto-in-taiwan
*   OneSafe Blog - Taiwan’s New Crypto AML Rules: Compliance and Consequences: https://onesafe.ai/blog/taiwan-crypto-aml-rules
*   The Paypers - Taiwan fast-tracks new AML regulations for crypto businesses: https://thepaypers.com/cryptocurrencies/taiwan-fast-tracks-new-aml-regulations-for-crypto-businesses--1266496
*   Taipei Times - FSC previews crypto penalties bill: https://www.taipeitimes.com/News/biz/archives/2024/06/13/2003819205 (Article dated June 13, 2024, but refers to a bill previewed "yesterday" and expected to be unveiled to lawmakers "before the end of this month [June 2024]" which seems to be a typo in the search result summary, as other sources point to mid-2025 for the *draft law*. The core information about the FSC previewing a bill and its contents is relevant.) More accurately, the article states the FSC "expects to unveil the draft to lawmakers before the end of this month [June 2024]", which refers to the preview/report to the Legislative Yuan, not necessarily the final comprehensive draft law mentioned for mid-2025 by other sources.
*   Taiwan Business TOPICS - Taiwan Keeps Cryptocurrency at Arm's Length: https://topics.amcham.com.tw/2023/03/taiwan-keeps-cryptocurrency-at-arms-length/ (Article from March 2023, providing historical context)
*   Mitrade - Taiwan advances crypto regulation with two drafts of “Virtual Asset Service Act”: https://www.mitrade.com/news/forex-news/taiwan-advances-crypto-regulation-with-two-drafts-of-virtual-asset-service-act (Article from April 2, 2024, discussing draft legislation)
*   Authme - AML Registration Guidelines for Taiwan's Virtual Currency Companies: https://authme.com/en/blog/aml-registration-guidelines-for-taiwans-virtual-currency-companies
*   Finance Magnates - Taiwan’s AML Rules Covering Crypto Firms to Take Effect Tomorrow: https://www.financemagnates.com/cryptocurrency/regulation/taiwans-aml-rules-covering-crypto-firms-to-take-effect-tomorrow/ (Article from November 29, 2024, confirming the Nov 30, 2024 AML registration start)
*   Kryptomoney - Taiwan’s Financial Watchdog Issues Draft Crypto Regulation Act: https://kryptomoney.com/taiwans-financial-watchdog-issues-draft-crypto-regulation-act/ (Article from March 26, 2025, discussing a draft Virtual Asset Service Act)
*   Binance Square (BlockTempo) - Taiwan's cryptocurrency tax has caused public complaints: https://www.binance.com/en/square/post/2024-01-14-taiwan-s-cryptocurrency-tax-has-caused-public-complaints-that-you-have-to-declare-even-if-you-haven-t-withdrawn-money-are-the-ministry-of-finance-and-the-financial-supervisory-commission-doing-their-own-thing-333390779770 (Article from January 14, 2024, discussing taxation)