Taiwan Compliance Report

Generated 2026-09-22

Partially Regulated

Regulatory Overview

Regulatory Status: Some rules exist but significant gaps; draft legislation or limited guidance
Key Regulator(s): Ministry of Justice Investigation Bureau, Taiwan Financial Supervisory Commission, Criminal Investigation Bureau
Risk Level: medium
Primary Legislation: being formalized into law, expected 2025-2026, It is widely expected that a future Virtual Asset Management Act will introduce, Taiwan Law and Regulation Database (English Translation): https://law.moj.gov.tw
Travel Rule: Adopted — Threshold: Implemented
Tax Reporting: Income tax on crypto profits; specific framework under development. Gains from the sale of cryptocurrencies are considered "Other Income" (其他所得) under Article 14 of the Income Tax Act.. These gains are consolidated with an individual's other taxable income (e.g., salary, professional income, interest) and are subject to progressive individual income tax rates, which currently range from 5% to 40%.. The taxable gain is calculated as: Sales Price - Acquisition Cost - Transaction Expenses.. Alternative Minimum Tax (AMT): If an individual's total taxable income (including certain non-taxable income items under regular tax, such as some capital gains, which may include crypto gains if they are substantial) exceeds a certain threshold (currently NT$7.5 million for 2023 filings), it may also be subject to the Alternative Minimum Tax at a flat rate of 20%. The AMT is levied if the AMT calculation results in a higher tax liability than the regular income tax.

Key Facts

aml Financial Supervisory Commission (FSC): The primary financial regulator in Taiwan responsible for overseeing financial institutions and has extended its oversight to VASPs regarding AML/CTF. Regulations Governing Anti-Money Laundering and Countering Terrorism Financing for Virtual Asset Service Providers (虛擬通貨平台及交易業務事業防制洗錢及打擊資恐辦法) Issued by the FSC, effective July 1, 2021. URL (FSC Announcement): https://www.fsc.gov.tw/ch/home.jsp?id=96&aplistdnid=0&dfile=list&qnode=14810 (Official Chinese text. English translations are often unofficial but widely available via legal firms). These regulations require VASPs to implement robust internal control systems for AML/CTF, report suspicious transactions, and conduct due diligence. Therefore, any entity providing custody services is considered a VASP and must comply with the FSC's VASP AML Regulations, including registration with the FSC, establishing internal control systems, and adhering to AML/CTF obligations. This is a registration and compliance requirement rather than a comprehensive licensing regime for prudential supervision of custody specifically. Segregation of Client Assets Rules: Current State: The VASP AML Regulations (Article 11) generally require VASPs to establish internal control and audit systems, including "measures for safeguarding virtual assets." While it does not explicitly mandate precise "on-chain segregation" to unique addresses per client or legal entity, it implicitly requires systems that ensure the safety and proper management of client assets. Best practices in the industry, even without explicit legal mandate, typically involve robust measures to distinguish client assets from proprietary assets.
enforcement Entity Targeted: David Pan (潘奕hofer), founder of ACE Exchange, and approximately 10 other individuals. Violation Type: Fraud, money laundering, operating an illegal pyramid scheme, organized crime. The group allegedly used fake tokens (NFTC, MOCT) to defraud investors out of hundreds of millions of New Taiwan Dollars. Penalty Amount: Assets worth over NT$200 million (approximately US$6.4 million) were frozen, including real estate, luxury cars, and cryptocurrency. The investigation is ongoing, and final penalties (imprisonment, further asset forfeiture) will be determined by the courts. Outcome: Key individuals, including the founder of a prominent Taiwanese exchange, were arrested. Assets were frozen, and legal proceedings are underway. This was a major blow to investor confidence and highlighted the risks within the unregulated parts of the crypto market. Entity Targeted: Numerous individuals and groups promoting "Pi Network" as a guaranteed high-return investment or operating multi-level marketing (MLM) schemes based on its unlisted cryptocurrency. Violation Type: Fraud, operating illegal pyramid schemes (violation of the Multi-level Marketing Supervision Act), misleading advertising. Penalty Amount: Varies per case, but includes arrests, asset seizures (though often smaller sums of cash, not directly crypto), and fines/imprisonment upon conviction. Specific aggregate amounts for all Pi Network-related crackdowns are hard to tally as they are localized efforts. Outcome: Numerous arrests across Taiwan, public warnings issued by authorities regarding the risks of Pi Network and similar speculative "investments," helping to protect potential victims. Entity Targeted: Individuals involved in online romance scams and investment fraud predominantly using Telegram, convincing victims to invest in fake cryptocurrency platforms. Violation Type: Fraud, money laundering. Penalty Amount: Arrests, freezing of bank accounts, and seizure of assets (e.g., millions of NTD in illicit gains). Specific fines and prison sentences are determined post-conviction. One operation in 2023 alone saw NT$110 million (US$3.5 million) in illicit gains seized. Outcome: Multiple arrests, significant amounts of illicit funds frozen or seized, raising public awareness about online investment scams. Outcome: Key individuals, including the founder of a prominent Taiwanese exchange, were arrested. Assets were frozen, and legal proceedings are underway. This was a major blow to investor confidence and highlighted the risks within the unregulated parts of the crypto market. Outcome: Numerous arrests across Taiwan, public warnings issued by authorities regarding the risks of Pi Network and similar speculative "investments," helping to protect potential victims. Outcome: Multiple arrests, significant amounts of illicit funds frozen or seized, raising public awareness about online investment scams.
general Industry Circular 43 of 2025, announcing FAQs titled Understanding Virtual Assets and VASP Regulation, covering VASP definitions, activities, and registration under the VASP Act. Guidance on Regulation of Virtual Assets in the Virgin Islands (BVI), clarifying applicability of legislation to virtual asset activities. Guidance on Application for Registration of a Virtual Assets Service Provider, detailing registration procedures, requirements, and documentation for VASPs. The instruction “copy these exact links into your claims” points to the URLs listed under Related Links → Local Organizations, International Organizations, etc., and also under the explicit source list at the end of the prompt. Therefore we must output a concise response that repeats those URLs exactly as they appear. The main SFB page: https://www.sfb.gov.tw/en/ International Organizations link (under “Related Links” → “International Organizations”): https://www.fsc.gov.tw/en Securities Trading Monthly … (pointing to a TWSE page) → https://www.twse.com.tw/en/products/education/foreign/overview.html
licensing FSC — VASP guidelines and oversight — dedicated law under legislative review Guiding Principles for Management of Virtual Asset Service Providers (2023) — VASP registration and conduct guidelines (being formalized into law, expected 2025-2026) VASP: VASP Registration under FSC guidelines (3-6 months). Dedicated VASP law under legislative review. Approach influenced by Japan and Singapore models. MaiCoin and BitoPro are major local players. CUSTODY: Customer asset segregation required under FSC guidelines EXCHANGE: VASP registration with FSC; information security management required. Self-regulatory organizations among exchanges. Stablecoin framework under development. Dedicated Legislation: The VASP Act specifically regulates virtual asset services, including exchanges, transfers, custody, and related financial services conducted in or from the BVI. It requires VASPs to register with the FSC before operating, with a transitional period for pre-2023 entities ending July 31, 2023. FSC Guidelines and Oversight: The FSC issues guidance (e.g., VASP Application Guidance, AML/CFT Notes, Travel Rule Guidance) and FAQs (latest published November 21, 2025) covering VASP definitions, registration, compliance obligations like AML/CFT systems, audits, and record-keeping, plus supervisory powers including enforcement and risk-based monitoring. Registration and Status: Over 16 VASPs have been approved since March 2024, with the FSC committing to initial feedback within 6 weeks and decisions within 6 months, though actual timelines vary.
stablecoin Financial Supervisory Commission (FSC): Responsible for financial markets, banking, and securities, and has taken the lead in VASP regulation. Central Bank of the Republic of China (Taiwan) (CBC): Focuses on monetary policy, financial stability, and payment systems, and is researching Central Bank Digital Currency (CBDC). Taiwan's FSC has proposed the Virtual Asset Services Act (2025), which provides a comprehensive regulatory framework for virtual assets including stablecoins, moving beyond just AML/CFT to cover licensing, custody, exchange, and investor protection, though the law is still a draft and not yet enacted. E-money/Payment Tokens/Securities: The FSC is actively studying international developments (e.g., MiCA in Europe, discussions in the US) and has indicated that future legislation might categorize stablecoins based on their design and function: E-money Tokens: Stablecoins pegged to fiat currency and intended for payments could be regulated similarly to e-money. Payment Tokens: If used purely as a medium of exchange. Securities: If a stablecoin's characteristics (e.g., profit-sharing, investment contract features) meet the definition of a security under the Securities and Exchange Act, it would be regulated by the Securities and Futures Bureau (part of the FSC). However, most fiat-backed stablecoins typically do not fall under this classification. Algorithmic Stablecoins: Given past failures, these are unlikely to be classified favorably, and might face stricter scrutiny or outright prohibitions if they cannot meet stability requirements.
status Taiwan regulatory status: partial, framework-developing
tax Income tax on crypto profits; specific framework under development Gains from the sale of cryptocurrencies are considered "Other Income" (其他所得) under Article 14 of the Income Tax Act. These gains are consolidated with an individual's other taxable income (e.g., salary, professional income, interest) and are subject to progressive individual income tax rates, which currently range from 5% to 40%. The taxable gain is calculated as: Sales Price - Acquisition Cost - Transaction Expenses. Alternative Minimum Tax (AMT): If an individual's total taxable income (including certain non-taxable income items under regular tax, such as some capital gains, which may include crypto gains if they are substantial) exceeds a certain threshold (currently NT$7.5 million for 2023 filings), it may also be subject to the Alternative Minimum Tax at a flat rate of 20%. The AMT is levied if the AMT calculation results in a higher tax liability than the regular income tax. The current corporate income tax rate in Taiwan is 20%. Losses from cryptocurrency sales can generally be offset against gains for corporate tax purposes. Mining: Profits derived from cryptocurrency mining (calculated as revenue from mined coins minus allowable expenses like electricity, hardware depreciation, internet fees) are considered taxable income. For individuals, this would likely fall under "other income" or "business income" if conducted professionally. For businesses, it's corporate income.
travel rule Travel Rule adopted — threshold: TWD 50,000

Sources

This report is AI-generated from publicly available regulatory sources. Last updated: 2026-09-09. View full profile