Taiwan enacts strict crypto law with severe penalties

Taiwan enacts a strict crypto law, requiring licenses for all platforms, full reserve backing for stablecoins, and imposing severe penalties for violations, including prison and hefty fines.

Taiwan has introduced the Virtual Asset Service Act, marking its first comprehensive regulatory framework for the cryptocurrency industry. Under this law, all virtual asset service providers—including exchanges and platforms—must secure licenses from the Financial Supervisory Commission before operating. The legislation imposes strict requirements on operations, governance, and asset custody. Stablecoin issuers are required to maintain full reserve backing and must obtain approval from both the central bank and the FSC. Existing platforms have 12 months to apply for licenses and 21 months to achieve full compliance. This new law replaces the previous anti-money laundering registration regime and introduces severe penalties for non-compliance, including up to seven years’ imprisonment and fines up to NT$100 million. The act aims to enhance consumer protection, financial stability, and legal clarity in Taiwan’s growing digital asset sector.