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Retail_Trading_Status

Current: Allowed-Regulated

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Individual citizens and residents in Taiwan are legally permitted to buy, sell, and hold cryptocurrencies. However, this activity falls under 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). The Central Bank of the Republic of China (Taiwan) and the Financial Supervisory Commission (FSC) do not consider cryptocurrencies as legal tender or "currency," but instead view them as highly speculative digital "virtual commodities".

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. The regulatory landscape has since evolved, with a significant focus on bringing VASPs under AML laws. The Money Laundering Control Act was amended to include VASPs, requiring them to comply with AML/CFT obligations akin 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 issued "Guidelines for Virtual Asset Service Providers (VASP Guidelines)" in September 2023, covering broader aspects beyond AML, including consumer protection and operational requirements. While not initially legally binding, compliance is expected to become mandatory.

Furthermore, Taiwan is actively working on a dedicated "Virtual Asset Management Act" or "Special Law for Crypto Exchange Management." Draft versions have been introduced, aiming to establish a comprehensive licensing regime for VASPs, moving beyond the current AML registration system. This 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. Public complaints have been reported regarding cryptocurrency taxation.

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. The government is taking steps to help the private sector organize a virtual assets industry association to promote self-regulation.

Bullet Points

## Retail Trading of Cryptocurrencies in Taiwan: Regulatory Status

**1. General Status:**

*   **Allowed-Regulated:** Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
*   **Not Legal Tender:** Cryptocurrencies are not considered legal tender or "currency" by the Central Bank of the Republic of China (Taiwan) and the Financial Supervisory Commission (FSC).
*   **Virtual Commodities:** Cryptocurrencies are viewed as highly speculative digital "virtual commodities."

**2. Key Regulatory Bodies and Their Roles:**

*   **Financial Supervisory Commission (FSC):**
    *   Primary regulatory body overseeing Virtual Asset Service Providers (VASPs).
    *   Responsible for AML registration and compliance.
    *   Developing a comprehensive licensing regime for VASPs.
    *   Issues guidelines and warnings related to cryptocurrency trading.
*   **Central Bank of the Republic of China (Taiwan) (CBC):**
    *   Monitors the cryptocurrency market but does not recognize cryptocurrencies as currency.
*   **Ministry of Finance:**
    *   Responsible for taxation of cryptocurrency transactions.

**3. Important Legislation and Regulations:**

*   **Money Laundering Control Act (AML Act):**
    *   Amended to include VASPs, requiring them to comply with AML/CFT obligations.
    *   Requires KYC procedures, record-keeping, and reporting suspicious transactions.
*   **VASP Guidelines (September 2023):**
    *   Issued by the FSC, covering broader aspects beyond AML, including consumer protection and operational requirements.
    *   Compliance is expected to gradually become mandatory.
*   **Virtual Asset Management Act (Draft):**
    *   A dedicated law under development to establish a comprehensive licensing regime for VASPs.
    *   Expected to cover minimum capital requirements, consumer protection, segregation of customer assets, and information transparency.
    *   FSC anticipates unveiling a draft to lawmakers around June 2025.

**4. Requirements for Compliance:**

*   **AML Registration:** VASPs, including cryptocurrency exchanges, are required to register with the FSC for AML compliance. (Effective November 30, 2024)
*   **KYC/AML Procedures:** VASPs must implement Know Your Customer (KYC) procedures and comply with Anti-Money Laundering (AML) regulations.
*   **Record-Keeping:** VASPs must maintain detailed records of transactions.
*   **Reporting Suspicious Transactions:** VASPs are required to report suspicious transactions to authorities.
*   **Local Presence:** Foreign VASPs intending to operate in Taiwan must establish a local presence (company or branch office) and complete AML registration.

**5. Notable Restrictions or Limitations:**

*   **Credit Card Ban:** Credit card services for the purchase of crypto-assets have been banned.
*   **Speculative Nature Warnings:** The FSC has issued warnings about the speculative nature and risks associated with cryptocurrencies.
*   **No Legal Tender Status:** Cryptocurrencies are not recognized as legal tender.

**6. Recent Developments or Changes:**

*   **AML Registration Implementation (November 30, 2024):** VASPs are now required to register with the FSC for AML compliance.
*   **Draft Virtual Asset Management Act:** Development of a comprehensive licensing regime for VASPs is underway, with a draft law expected around June 2025.
*   **FSC Bill Preview:** The FSC previewed a bill to punish illegal activities linked to cryptocurrencies with steep penalties.
*   **Industry Association:** The government is taking steps to help the private sector organize a virtual assets industry association to promote self-regulation.

**7. Taxation:**

*   **Securities Trading Profits and Losses:** Profits from trading virtual currencies considered to be of a securities nature are treated as "securities trading profits and losses."
*   **Property Transaction Income:** For other crypto transactions, individual investors must report gains as property transaction income.

Full Analysis Report

Complete markdown report for this analysis

## 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.

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.

---

**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)

Change Tracking

Change Justification

Explain why this analysis was changed or reconciled

Okay, as a specialized financial regulatory analyst, here's a detailed breakdown of the changes between the previous and new analysis of Taiwan's Retail_Trading_Status:

**Overall Summary of Changes:**

The new analysis, dated June 26, 2025, provides an updated and more detailed picture of Taiwan's evolving crypto regulatory landscape. While the core status of `Allowed-Regulated` remains unchanged, the new analysis incorporates developments that have occurred or become clearer since the previous report. Key changes include:

1.  **Confirmation and Elaboration on Implemented Regulations:** The Nov 30, 2024, VASP AML registration requirement, which was upcoming in the previous analysis, is now confirmed as implemented.
2.  **Increased Detail on Forthcoming Dedicated Legislation:** The new analysis provides more concrete information about the "Virtual Asset Management Act" (or similar title), including its expected scope (licensing, capital requirements, consumer protection) and a more specific timeline for draft presentation (around June 2025).
3.  **Inclusion of Taxation:** The new analysis introduces information on how cryptocurrency gains are taxed for individuals, a topic not covered in the previous narrative.
4.  **Refinement of Historical Context:** Minor additions, like the 2014 FSC prohibition on banks offering Bitcoin services, provide a slightly more complete historical picture.
5.  **Updated Supporting Evidence:** The new analysis relies on more recent sources and a broader array of excerpts, reflecting the latest developments and discussions.
6.  **Slight Shift in Emphasis:** While AML/CFT remains central, there's a stronger articulation of the move towards a comprehensive licensing regime and broader consumer protection measures within the forthcoming dedicated law.

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**Detailed Changes by Section:**

**1. Retail_Trading_Status:**
    *   **Previous Analysis:** `Allowed-Regulated`
    *   **New Analysis:** `Allowed-Regulated`
    *   **Change:** No change in the overall status.

**2. Narrative Explanation:**

*   **Historical Context:**
        *   **Previous:** Mentioned the 2013 joint press release (Bitcoin as "virtual commodity").
        *   **New:** Adds the 2014 FSC prohibition on local banks accepting Bitcoin or providing Bitcoin-related services.
        *   **Change:** Slightly more detailed historical background.

*   **AML/VASP Registration (Nov 30, 2024):**
        *   **Previous:** Described the VASP registration as "transitioning to a formal AML registration system effective November 30, 2024" and noted amendments to MLCA (July 2024) and VASP Registration Regulations (effective Nov 30, 2024).
        *   **New:** States, "Starting November 30, 2024, VASPs... are required to register with the FSC for AML compliance."
        *   **Change:** Confirms the implementation of the previously anticipated registration system.

*   **VASP Guidelines (Sept 2023):**
        *   **Previous:** Stated guidelines "signal a move towards broader consumer protection and market integrity."
        *   **New:** Adds, "While not initially binding from a purely legal standpoint... there's an expectation that compliance will gradually become mandatory."
        *   **Change:** Provides more nuance on the current legal standing and future expectations for the VASP Guidelines.

*   **Dedicated Legislation (Special Law):**
        *   **Previous:** "Taiwan is actively considering dedicated legislation... with drafts potentially emerging in 2025... draft law around June or July of 2025."
        *   **New:** "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... 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."
        *   **Change:** This is a significant update. The new analysis:
            *   Uses more definitive language ("actively working on," "draft versions... introduced").
            *   Provides potential names for the act.
            *   Details the expected scope of this comprehensive licensing regime beyond just AML.
            *   Reaffirms the June 2025 timeline for unveiling a draft to lawmakers.

*   **Taxation:**
        *   **Previous:** Not explicitly mentioned in the narrative.
        *   **New:** Includes a new paragraph: "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."
        *   **Change:** Introduction of a new, important aspect of the retail trading environment.

*   **Credit Card Restrictions:**
        *   **Previous:** "funding crypto purchases with credit cards were restricted."
        *   **New:** "credit card services for the purchase of crypto-assets have been banned."
        *   **Change:** More definitive and stronger wording regarding the credit card ban.

*   **Self-Regulatory Organization (SRO):**
        *   **Previous:** "The FSC is also encouraging the formation of a VASP self-regulatory organization (SRO)."
        *   **New:** The narrative does not explicitly mention the SRO, though a supporting excerpt (Taipei Times) does: "The government is taking steps to help the private sector organize a virtual assets industry association to promote self-regulation..."
        *   **Change:** Less prominence in the main narrative of the new analysis, but still supported by newer evidence.

*   **Overall Regulatory Focus:**
        *   **Previous:** "regulated environment focused primarily on AML/CFT compliance... with increasing attention being paid to broader investor protection and market integrity measures."
        *   **New:** "regulated primarily through AML/CFT measures for VASPs, the focus remains on investor protection and financial stability as the regulatory framework continues to mature."
        *   **Change:** Slight shift in emphasis, explicitly adding "financial stability" and framing the current AML/CFT as primary while the framework matures towards broader goals.

**3. Supporting Excerpts:**

*   **Previous Analysis:** Included excerpts focusing on the initial stance, AML implementation, VASP requirements (pre-Nov 2024 registration), new registration requirements, offshore VASP rules, 2023 VASP Guidelines, and future legislation (as of late 2024/early 2025).
    *   **New Analysis:**
        *   Retains some similar foundational excerpts (e.g., from Global Legal Insights on AML).
        *   Adds many new excerpts from more recent sources (e.g., Law.asia May 2025, Taiwan Business TOPICS March 2025, Taipei Times June 2025 (referring to a June 2024 report), Kryptomoney March 2025, Binance Square Jan 2024 on tax).
        *   These new excerpts provide more current details on:
            *   The status of the AML registration (Authme Dec 2024, Law.asia May 2025).
            *   The progress and expected content of the dedicated "Virtual Asset Management Act" (Taiwan Business TOPICS, Taipei Times, Kryptomoney).
            *   Taxation (Binance Square).
            *   The non-security nature of most cryptoassets allowing trading without specific licenses beyond AML (Law Over Borders, Law.asia).
    *   **Change:** Significant update and expansion of supporting evidence with more recent and diverse sources, reflecting the latest developments, particularly concerning the forthcoming comprehensive legislation and taxation.

**4. Source URLs:**

*   **Previous Analysis:** Provided 7 URLs, with sources generally up to late 2024/early 2025.
    *   **New Analysis:** Provides 16 URLs, indicating a broader research base and inclusion of more recent publications (many from late 2024 and H1 2025). Several new sources like Law.asia, Taiwan Business TOPICS, Taipei Times, Kryptomoney, and Authme are introduced.
    *   **Change:** A substantial increase in the number and recency of cited sources, strengthening the analysis with more current information. The new analysis also includes a note clarifying a potential date discrepancy in one of the Taipei Times search result summaries versus the article's actual content/timeline, showing careful source evaluation.

**Conclusion:**

The new analysis represents a significant update, reflecting the dynamic nature of cryptocurrency regulation in Taiwan. It confirms the implementation of the VASP AML registration system and, more importantly, provides much clearer insight into the government's plans for a comprehensive "Virtual Asset Management Act." The inclusion of taxation details and a wider range of recent supporting evidence makes the new analysis more thorough and current. The core message remains that retail trading is allowed but within an increasingly structured and expanding regulatory environment aimed at AML/CFT, investor protection, and financial stability.

Previous Status: Allowed-Regulated

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