Taiwan's legislature passed its first comprehensive crypto law, threatening unlicensed operators with up to seven years in prison.
$BTC The Virtual Asset Service Act cleared its third reading on Tuesday and now goes to President Lai Ching-te, who is expected to sign it within ten days. It creates a licensing regime for all virtual asset service providers, with the Financial Supervisory Commission (FSC) overseeing seven categories: exchanges, trading platforms, transfer firms, custodians, underwriters and lending services.
The law also sets Taiwan's first stablecoin framework. Issuers need approval from both the central bank and the FSC, must hold full reserves in trust, and face routine audits and public disclosures. Domestic stablecoin issuance is limited to banks.
Penalties are steep. Operating without a license or issuing a stablecoin without approval can bring up to seven years in prison and fines reaching NT$100 million ($3.14 million). Fraud and market manipulation carry three to ten years and fines between NT$10 million and NT$200 million ($314,000 to $6.28 million).
Firms that completed anti-money laundering registration before the law takes effect get a transition window: twelve months to file license applications and up to twenty-one months to obtain full approval. The FSC can extend that window by three months, once.
Taiwan's government has disclosed holdings of 210 bitcoin valued near $18 million and has floated plans for a strategic bitcoin reserve and broader BTC regulation. The new act gives that ambition a legal foundation.
If you run a crypto business in Taiwan, you would need FSC approval before operating—or risk prison. If you're a Bitcoin holder elsewhere, Taiwan's move adds to a growing set of national laws that could shape how exchanges and stablecoins operate across Asia.
Taiwan is pairing an open door for licensed firms with some of the region's harsher criminal penalties.
Do you think Taiwan's tough penalties will attract or scare off crypto businesses? 👇
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