Binance, recognized as the world’s leading cryptocurrency exchange in terms of trading volume, has officially filed for registration in Taiwan. This move aligns with the provisions of the Money Laundering Control Act and guidelines set by the Financial Supervisory Commission (FSC).
In a confidential meeting held on Tuesday, the Financial Supervisory Commission apprised several indigenous crypto service providers of Binance’s endeavors to attain Anti-Money Laundering (AML) accreditation.
Chen Peiyun, who co-founded the Taiwanese crypto exchange BitShine, provided insights suggesting that the FSC has identified Binance as a potential entrant seeking to penetrate Taiwan’s crypto market landscape.
While Taiwan’s cryptocurrency industry operates with minimal regulatory oversight, the FSC instituted AML directives in July 2021. With this, the FSC mandated that all virtual asset service providers (VASPs) adhere strictly to the nation’s anti-money laundering protocols.
Taiwan’s FSC Developing Comprehensive Guidelines for Cryptocurrency Trading and Payments by VASPs
In March, the Financial Supervisory Commission (FSC) of Taiwan was designated as the chief regulatory authority for the country’s cryptocurrency sector. The commission is now in the process of devising detailed protocols for trading and payments in cryptocurrencies tailored for Virtual Asset Service Providers (VASPs), as stated in the regulator’s announcement.
The FSC has shared its plan to introduce these VASP-specific guidelines by September’s end.
Kevin Cheng, an executive with the Taiwan Fintech Association and previously the Chief Compliance Officer at the Taiwanese cryptocurrency exchange BitoEX, indicated that the FSC is inclined towards implementing rigorous regulatory measures on cryptocurrency platforms in Taiwan. These proposed measures mirror the regulations imposed on mainstream financial institutions.
Elaborating on this, Cheng mentioned, “The FSC envisions a framework where VASPs will have to ensure distinct demarcation between the cryptocurrency assets they hold and those of their clients. Furthermore, these platforms will be obligated to subject themselves to annual scrutiny by certified accounting agencies.”
Cheng recognized the intricacies of implementing such regulations, pointing out that many accounting firms might hesitate to onboard clients involved in the cryptocurrency sector, given the specialized expertise needed.
“It’s not just about the usual accounting or auditing practices. It requires a profound understanding of the nuances associated with cryptocurrency,” stressed Cheng.
However, there’s a notable shift in Taiwan’s regulatory environment. In April, lawmakers put forth a proposed amendment to the law to inaugurate a distinct bureau within the FSC, exclusively concentrating on crypto-related affairs.
This amendment has undergone its initial reading in April. To turn it into law, it has to successfully pass through two more readings.
Should this be accomplished, the dedicated crypto bureau would become a part of the FSC, alongside its current departments overseeing banking, securities and futures, insurance, and auditing.
Binance’s Growing Presence: Establishing Foothold in Taiwan with Government Approval and Registered Capital
Binance is making significant inroads in its Asian expansion efforts. By establishing its operations under the name ‘Binance International Limited Taiwan Branch (Seychelles),’ it secured the green light for company registration from the government on May 12, 2023. This nod came with a registered capital sum of NT$30 million, which equates to approximately $944,000, earmarked for its Taiwan operations.
Furthering its commitment to the region, Binance joined hands with Taiwan’s Criminal Investigation Bureau in July. This collaboration aims to assist more than 200 law enforcement agents in addressing crimes linked to digital assets.
With the surging popularity of cryptocurrencies, Damien Ho, who serves as Binance’s Head of Global Partnerships, underscored the imperative of providing a secure and user-friendly crypto environment for Taiwanese patrons.
“As the fascination with cryptocurrency amplifies among the Taiwanese population, ensuring a safe and user-friendly crypto environment becomes crucial.”
In a subsequent strategic move, Binance expanded its footprint to Japan. This expansion came on the heels of its acquisition of Sakura Exchange BitCoin in November 2022. This pivotal acquisition not only provided Binance with a significant presence in Japan but also brought it under the regulatory purview of the Japan Financial Services Agency.
