Table of Contents
ToggleCash Transactions Difficult to Track, Becoming a Fraud Loophole: FSC Requires VASP Association to Revise Self-Regulatory Rules within a Month
To prevent increasingly diverse fraud and money laundering methods, Taiwan's Financial Supervisory Commission (FSC) has launched a new anti-fraud mechanism for the virtual asset industry. Following the Inspection Bureau's announcement of financial inspections for virtual asset providers, the FSC's Securities and Futures Bureau (FSC) formally sent a letter to the Taiwan Virtual Currency Business Association (VASP Association) on May 7th, requiring them to revise their self-regulatory rules within one month, prohibiting members from accepting cash for virtual asset transactions. This move will enhance financial flow traceability and reduce fraud risks, expected to be implemented as early as the end of June.
Financial Flow Transparency! FSC: Comprehensive Ban on Cash Transactions, Incorporated into Self-Regulatory Rules
According to the FSC's letter, due to the difficulty in tracking cash transaction fund flows, which can create financial flow断points easily exploited by criminals for money laundering and fraud, the VASP Association is required to inform its members to use traceable transaction methods when dealing with clients. They must draft revised self-regulatory rules by June 6th for review.
The FSC stated that once the revision is completed and reviewed, it could be implemented within two weeks, though there is a risk of delay if the content is incomplete. Although there is currently no explicit legal prohibition on cash transactions, the self-regulatory mechanism will help implement anti-fraud policies in advance.
Market Rumors Spreading? FSC Clarifies: No Ban on New Taiwan Dollar Transactions, Over-the-Counter Trading Still Possible
As this measure might impact physical currency exchange businesses, market rumors spread about the FSC potentially banning New Taiwan Dollar transactions or over-the-counter (OTC) trading, causing industry anxiety. The FSC firmly clarified that these rumors are false. As long as they meet registration requirements, individual currency traders or physical businesses can still legally apply for operations and engage in cryptocurrency exchange services.
VASP Association Stance: Cooperating with Revisions, Actively Communicating, Balancing Development and Compliance
Facing policy changes, the VASP Association quickly responded, stating they will adhere to self-regulatory principles, actively communicate with regulatory authorities, and help members achieve financial flow transparency. The association noted that its membership is diverse, with impact varying across different members, particularly affecting Category B members consisting of physical stores and Bitcoin ATM operators.
The association emphasized their commitment to finding a solution that protects consumer rights, assists businesses in transformation, and promotes stable industry development, helping Taiwan's virtual asset providers develop long-term under a compliant regulatory framework.
Will Physical Operators Survive the Impact? FSC: Can Use Company Accounts for Transfers
For physical cryptocurrency merchants, canceling cash transactions undoubtedly changes their operating model. The Securities and Futures Bureau noted that while credit cards and electronic payments are still not open for virtual asset transactions, physical operators can still receive payments through general company accounts, such as requesting customer bank transfers. Some businesses have already adopted this method, and it should not cause a fatal impact on their survival in the short term.
Market Elimination Wave Beginning? Multiple Operators Quietly Exiting
According to industry sources, several physical operators have chosen to exit the market, including "Xia He" which did not apply for registration before the March 31 deadline, and "Yi Lu Fa", "Yin Tianxia", "Coin Thinking Technology", and "Asia Pacific Easy Ant" which have been gradually withdrawing since last November. Currently, B-class members have decreased from 10 at the initial establishment to only 5 remaining, including Hongzhu Digital, Taiwan Zhijing, Sunfest, Power International, and Yang Family.
Cooperating with Inspections and Policy Adjustments, Securities and Futures Bureau: Market Naturally Eliminates the Weak
With criminal police intensifying anti-fraud actions, the FSC inspection bureau launching financial inspections, and the self-regulatory rules modification targeting cash transactions, virtual asset operators are facing stricter compliance requirements. The Securities and Futures Bureau believes that some operators choosing to exit after evaluating their own conditions is a normal market adjustment mechanism that helps the industry develop in a more stable and transparent direction.
Risk Warning
Cryptocurrency investment carries high risks, and its price may fluctuate dramatically. You may lose all your principal. Please carefully assess the risks.
