Taiwan Democratic Progressive Party legislator Kuo Kuo-wen held a public hearing on "Virtual Asset Supervision" on the morning of September 7. The meeting discussed whether to establish a special unit "Financial Technology Bureau" for supervision; whether Taiwan should open leveraged derivatives trading and other issues Discussions were held. Representatives from Binance and Bitfinex attended the meeting. Wu Blockchain that he compiled the following content based on the meeting minutes:
Opening statement by government representative
Huang Xihe, leader of the Securities Dealers Management Group of the Financial Supervisory Commission:
1. The Virtual Currency Business Association is about to be established. The specific implementation of the internal guiding principles must be developed by the association. The establishment of a special law is time-consuming. At present, it still must rely on the independent management of the industry association;
2. The more controversial parts of the current autonomous management draft include the issuance white paper, transparency, asset separation, etc.;
3. Some industry players have questioned whether accountants have the ability to conduct audits through certain procedures, and there are currently no appropriate insurance companies that can underwrite the insurance part.
Shi Weiren, deputy director of the Digital Industry Administration of the Digital Department:
Blockchain technology is a transnational technology. The main business of the Digital Department is to promote its technology to all walks of life, and launch demonstration and coaching industries, which can be applied to evidence storage, evidence collection, and verification.
You Liling, Section Chief of the Procuratorial Department of the Ministry of Justice:
At present, we are actively cooperating with the Police Department to combat fraud, which is particularly serious for individual currency dealers and small-scale operators. It is recommended that they be regulated with the same standards regardless of their size.
Lin Mingjun, Chief of the Economic Section of the Police Department:
There are currently many fraud and money laundering challenges, and regulations should be established first by the administrative department and then implemented by criminal units. Common crimes currently include fraud, money laundering, computer extortion, and physical crimes, such as kidnapping during transactions. We hope that supervision can be legalized. Self-discipline alone will cause many problems, and we hope that both platforms and over-the-counter operators (OTC) will be included in the supervision.
Industry representatives speak
Maicoin Chief Operating Officer Chen Minghui:
1. Regarding the supervision part, it is expected that special laws will be adopted, but management should be hierarchical, and smaller operators should have different management. Different commodities should also be regulated differently;
2. Regarding the issue of joint prevention of fraud, it is currently difficult for industry players to take joint prevention measures. They can only exchange information with government units in private, but cannot directly prevent customers from being defrauded;
3. The separation of assets will significantly increase costs and lead to operational difficulties. Support the establishment of foreign currency dealers, but must have the same regulatory standards.
Binance Global Partnership He Xuanrong:
The asset separation system must be verified by an accountant. You can refer to Japan. Employee capabilities have a great impact on transparency and market fairness, and employee training should be strengthened. Three suggestions are provided:
1. Treat virtual assets as new independent financial assets;
2. Establish a dedicated team management team with diverse backgrounds to provide a more diverse perspective and a new understanding that is different from the traditional;
3. Good horizontal cross-field cooperation and communication are required.
Scholar representatives speak
Professor Li Kunzhang:
1. What are the standards of the guiding principles? Will public companies be used as the standard, or will the competent authorities set new internal audit and internal control standards in the future?
2. The government should take the development of trading platforms seriously to prevent Taiwan from being marginalized.
3. Counseling and supervision should be separated. It is recommended that the Financial Supervisory Committee be responsible for supervision and the Digital Department serve as the coaching agency to avoid the problem of player-referee. At present, all the ability to combat fraud lies with inspection agencies, and administrative agencies should clarify regulatory rules as soon as possible.
Teacher Zang Zhengyun:
1. Virtual asset disputes are not suitable to be divided into many links for discussion. They are suitable to be handled jointly in an integrated manner to avoid conflicts among various departments.
2. When consumer disputes arise in the future, who should be responsible for resolving the disputes. It is recommended to establish a FinTech Bureau and provide relevant units with sufficient supervision resources.
3. In the future division of labor, which matters can be self-regulated and which matters are heterogeneous should be discussed extensively.
Associate Professor Xu Peiling:
1. Paragraph 5 of Article 2, Paragraph 2 of the current guiding principles is not clear enough and needs further discussion. Article 3: What are the reasons for excluding stablecoins? Moreover, if the classification is too detailed and different currencies have different regulations, it will increase the difficulty for industry players to comply with regulations. It is recommended to establish a special law to include all types. Article 10 What is the level of major events?
2. Smaller operators will also have to bear the high cost of legal compliance, which will increase the pressure on the operators.
3. Will you consider opening up derivatives in the future? It is also recommended to create a dedicated supervisory authority as a dedicated supervision.
Association representative speaks
Cai Yuling, Chairman of Taiwan Fintech Association:
The industry is currently facing the challenge of traditional finance entering the market. At this stage, Taiwan is only focusing on supervision and lacks clarity on industrial development policies. It hopes to have a more active industrial policy. The industry changes rapidly, and the establishment of special laws requires sufficient flexibility.
The principle of self-discipline should be classified and standardized.
Attorney Li Yunheng/Deputy Secretary-General of Taiwan Virtual Assets Anti-Money Laundering Association:
The guiding principles and anti-money laundering definitions are broad, and the application of the same set of standards to all mechanisms places an excessive burden on some industry players. We hope that after the establishment of the trade association, communication with various ministries can be promoted, and we hope that the competent authorities will assist the industry in increasing professional knowledge and capabilities within the industry.
Lin Hongyu, Chairman of Bitcoin and Virtual Currency Development Association:
1. After the trade association is established, it is recommended that the competent authority and the trade association work more closely to make the regulations concrete. As for the supplementary provisions of the current guiding principles, regarding the prohibition of advertising on overseas platforms, it is recommended that industry associations should be authorized to formulate it, and some industry players have suggested whether it is possible for domestic compliant businesses to jointly market with overseas platforms to ensure liability and consumer protection.
2. Insurance (such as commercial insurance, reinsurance), accounting (internal audit and internal control), and law (legal compliance assessment) will be one of the important supporting packages of the guiding principles in the future. They should cooperate with insurance industry associations and accountants/lawyers associations to assist in formulating relevant supervision packages. .
3. At present, the association has established formal communication channels with the Salvadoran authorities (including the Virtual Assets Bureau, the Central Bank, and the Presidential Palace) and is willing to share the communication channels with everyone.
4. Promote the normalization of the industry, call for the expansion of the scope of money laundering prevention statements, reduce gray area, underground, illegal operators, allow those willing to comply with regulations to officially enter the industry, and call for the establishment of a new [Virtual Assets Bureau] to ensure supervision capacity
Lawyer representative speaks
Lawyer/Founder of Xinxi International Business Law Firm Cao Weijie:
1. There should be hierarchical and classified supervision. For example, requiring individual currency dealers to separate assets would be too burdensome for the industry. It is recommended that the industry and the inspection and commissioning unit jointly discuss the case and discuss common standards.
2. The cost of the currency flow tracker is relatively high. Can there be a role similar to the CHEP to coordinate and reduce the cost?
3. Support the formulation of special laws and the establishment of a FinTech Bureau.
Xiong Quandi, partner at Lee & Li Law Firm:
At present, the characterization of virtual currencies around the world is still different. Is it appropriate to apply traditional regulations to virtual currencies?
It is recommended that a dedicated agency should be established and special laws be formulated for management.
FSC’s response
Huang Xihe, leader of the Securities Dealers Management Group of the Financial Supervisory Commission:
1. It will take a long time to formulate special laws. At this stage, priority is still given to self-regulatory regulations. The details of internal control standards are left to the industry association to formulate.
2. Consumer disputes are handled by the industry based on contractual relationships, and industry associations can also participate in providing assistance.
3. Stablecoins are excluded because Taiwan is currently unable to issue them because it involves legal currency supply issues. The definition and announcement method of major incidents are left to the industry association to formulate.
4. The part where domestic operators assist foreign operators in publishing advertisements should be carefully considered because it is difficult for consumers to claim compensation from foreign operators and it is difficult to clarify responsibilities.
Huang Chaobang, deputy director of the Futures Management Group of the Financial Supervisory Commission:
Currently, we have received 27 anti-cleaning statements, 23 of which need to be supplemented, and 4 are still under review. We will continue to promote the review of anti-cleaning statements and announce new operators who have completed them as soon as possible.
Chairman's response
Preliminary conclusions of the public hearing meeting:
1. The guiding principles must take into account the affordability of the industry and cannot blindly require de-risking.
2. Regulations should not only focus on intensity but also breadth.
3. It is recommended that the government develop appropriate industrial development policies.
4. It is recommended to establish a Financial Technology Bureau to take charge of management.
5. The goal is to move towards the establishment of special laws.
