Press Release
FSC Reminds the Public of Related Risks of Virtual Assets
2021-04-20
The Financial Supervisory Commission (FSC) stated that it has issued several press releases to remind the public of related risks associated with virtual assets. In response to recent fluctuations in the prices of virtual assets such as Bitcoin and an increased number of reports on the use of blockchains and virtual assets for illegal fundraising and fraud, the FSC wishes to call attention to the following matters:
1. The Central Bank had, in collaboration with the FSC, issued a press release in 2013 which defined Bitcoin as a highly speculative digital "virtual asset" and not a currency. This definition is consistent with international views.
2. The "Security Token Offerings" (STO) are securities defined in the Securities and Exchange Act and must be governed by related regulations in the Securities and Exchange Act. Other virtual assets such as Bitcoin are not financial products approved for issuance by the FSC and are thus not currencies.
3. The prices of virtual assets fluctuate quickly and incur high investment risks. The public is advised to thoroughly study the business model before engaging in transactions in order to avoid fraud or investment losses from damaging their interest.
4. The money laundering control measures for virtual assets (virtual currencies) can be classified based on the nature of the virtual assets described as follows:
(1) STO: The FSC has requested operators of platforms for STO transactions to obtain a securities dealer license and comply with the regulations on anti-money laundering and combating the financing of terrorism (AML/CFT) of securities firms.
(2) Virtual assets such as Bitcoin: Although such assets are not legal tender or financial products authorized for sales by the competent authority, the Money Laundering Control Act of Taiwan has included "enterprises handling virtual currency platform or transactions" (hereinafter referred to as the enterprise) into the scope of anti-money laundering control in response to its inherent money laundering risks.
a. According to Article 5, Paragraph 4 of the Money Laundering Control Act, the scope of the enterprise shall be reported by the Ministry of Justice and the FSC to the Executive Yuan for designation. The Ministry of Justice issued a letter with the FSC to the Executive Yuan on January 20, 2021 and the Executive Yuan has designated the scope of the enterprise on April 7, 2021. The designation will be implemented on July 1, 2021.
b. The enterprise is required to implement customer due diligence, record-keeping, suspicious transaction reports, and money laundering control measures in accordance with the Money Laundering Control Act. The AML/CFT regulations governing such enterprises shall be established by the FSC based on AML management targets and published in accordance with administrative procedures.
Contact unit: Legal Affairs Division, Banking Bureau
Telephone: (02)8968-9625
If you have any questions, please send an email to the FSC's public opinion mailbox
(https://fscmail.fsc.gov.tw)
1. The Central Bank had, in collaboration with the FSC, issued a press release in 2013 which defined Bitcoin as a highly speculative digital "virtual asset" and not a currency. This definition is consistent with international views.
2. The "Security Token Offerings" (STO) are securities defined in the Securities and Exchange Act and must be governed by related regulations in the Securities and Exchange Act. Other virtual assets such as Bitcoin are not financial products approved for issuance by the FSC and are thus not currencies.
3. The prices of virtual assets fluctuate quickly and incur high investment risks. The public is advised to thoroughly study the business model before engaging in transactions in order to avoid fraud or investment losses from damaging their interest.
4. The money laundering control measures for virtual assets (virtual currencies) can be classified based on the nature of the virtual assets described as follows:
(1) STO: The FSC has requested operators of platforms for STO transactions to obtain a securities dealer license and comply with the regulations on anti-money laundering and combating the financing of terrorism (AML/CFT) of securities firms.
(2) Virtual assets such as Bitcoin: Although such assets are not legal tender or financial products authorized for sales by the competent authority, the Money Laundering Control Act of Taiwan has included "enterprises handling virtual currency platform or transactions" (hereinafter referred to as the enterprise) into the scope of anti-money laundering control in response to its inherent money laundering risks.
a. According to Article 5, Paragraph 4 of the Money Laundering Control Act, the scope of the enterprise shall be reported by the Ministry of Justice and the FSC to the Executive Yuan for designation. The Ministry of Justice issued a letter with the FSC to the Executive Yuan on January 20, 2021 and the Executive Yuan has designated the scope of the enterprise on April 7, 2021. The designation will be implemented on July 1, 2021.
b. The enterprise is required to implement customer due diligence, record-keeping, suspicious transaction reports, and money laundering control measures in accordance with the Money Laundering Control Act. The AML/CFT regulations governing such enterprises shall be established by the FSC based on AML management targets and published in accordance with administrative procedures.
Contact unit: Legal Affairs Division, Banking Bureau
Telephone: (02)8968-9625
If you have any questions, please send an email to the FSC's public opinion mailbox
(https://fscmail.fsc.gov.tw)
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- Update： 2021-05-12
