Binance Seeks Registration in Taiwan Under Money Laundering Control Act and FSC
Binance, the global leader in cryptocurrency exchange by trading volume, has submitted an application for registration in Taiwan according to the Money Laundering Control Act and the Financial Supervisory Commission (FSC).
During a private meeting on Tuesday, Taiwan's Financial Supervisory Commission informed numerous local crypto service providers that Binance is seeking Anti-Money Laundering (AML) compliance.
The report, sourced from Chen Peiyun, co-founder of Taiwan's BitShine crypto exchange, stated that the FSC identified Binance as a prospective exchange aiming to join the crypto market in Taiwan.
Taiwan's cryptocurrency sector lacks significant regulation, but the FSC established AML guidelines in July 2021. The FSC made it obligatory for virtual asset service providers (VASPs) to follow the country's anti-money laundering laws.
Taiwan's FSC Developing Comprehensive Guidelines for Cryptocurrency Trading and Payments by VASPs
Taiwan's Financial Supervisory Commission (FSC), appointed as the primary regulator for the cryptocurrency industry in March, is formulating comprehensive guidelines for trading and payments involving cryptocurrencies for Virtual Asset Service Providers (VASPs), according to the regulator's statement.
The FSC has revealed that it intends to release these VASP guidelines by the end of September.
Kevin Cheng, a director at the Taiwan Fintech Association and former chief compliance officer at the Taiwanese crypto exchange BitoEX, disclosed that the FSC aims to impose stringent regulations on crypto platforms in Taiwan, akin to those governing traditional financial institutions.
Cheng explained, "The FSC is planning to mandate that VASPs maintain a clear separation between their crypto assets and clients. Additionally, they will be required to undergo annual audits by accounting firms."
He acknowledged the challenge of such a rule, noting that many accounting firms might be apprehensive about taking on crypto-related clients due to the specialized knowledge required.
"It's not solely about accounting or auditing techniques but more about understanding crypto-related information," Cheng emphasized.
However, a recent development in Taiwan's regulatory landscape involves legislators proposing a law amendment in April to establish a dedicated bureau within the FSC specifically focused on crypto-related matters.
Although the amendment underwent its first reading in April, it must pass second and third readings to be enacted.
If successful, this new bureau would join the FSC's existing bureaus responsible for banking, securities and futures, insurance, and auditing oversight.
Binance's Growing Presence: Establishing Foothold in Taiwan with Government Approval and Registered Capital
Binance's expansion in Asia is evident. Operating via 'Binance International Limited Taiwan Branch (Seychelles),' it gained government approval for company registration on May 12, 2023. This approval came with a registered capital of NT$30 million ($944,000) in Taiwan.
In July, Binance also engaged with Taiwan's Criminal Investigation Bureau, collaborating to aid over 200 law enforcement officers tackle digital asset-related crime.
Given the increasing interest in cryptocurrency, Damien Ho, Binance's Head of Global Partnerships, highlighted the importance of ensuring a secure and comfortable crypto ecosystem for users in Taiwan.
"As a growing number of people in Taiwan grow an interest in cryptocurrency, it is important that the crypto ecosystem feels safe and comfortable for users."
In another move, Binance extended its presence to Japan. The recent launch in Japan follows its acquisition of Sakura Exchange BitCoin in November 2022. This strategic move established a foothold in Japan and subjected Binance to regulation by the Japan Financial Services Agency.