Virtual Asset Service Act Passes Third Reading! VASP Association Focuses on 3 Main Tasks: Continuously Promote Subsidiary Regulations to Align with International Standards

On June 30, Taiwan’s Legislative Yuan passed the third reading of the Virtual Asset Service Act, announcing that the industry is entering an era of governance under specialized legislation. The Virtual Asset Service Association will focus on drafting subsidiary regulations and strengthening anti-fraud coordinated prevention.

[This article is provided by the Virtual Currency Association]

Today (6/30), the Legislative Yuan officially passed the third reading of the “Virtual Asset Service Act” (hereinafter referred to as the Special Law). The Republic of China Virtual Asset Service Commercial Association (hereinafter referred to as the VASP Association) stated that the passage of the Special Law symbolizes that Taiwan’s virtual asset industry has officially entered a new era of “governance under specialized legislation.” This milestone relies on proactive efforts by the competent authorities, the legislative bodies, and the entire industry to drive the development—marking a defining milestone for Taiwan’s digital finance development.

As a key bridge for communication between the public and private sectors, the VASP Association would like to express its special thanks to the competent authorities and the legislative bodies for continuously listening to the practical needs of the industry, while balancing innovative development and risk management, and for advancing the legislation with an open and pragmatic attitude. The core spirit of the Special Law lies in regulation and innovation: enabling compliant operators to operate on a legal foundation, protecting investors’ rights and interests, and achieving society’s trust and peace of mind regarding virtual assets.

Moving from industry self-regulation to governance under specialized legislation is a new starting point for Taiwan’s digital finance to be comprehensively upgraded. After the Special Law takes effect, the VASP Association will fully focus on three core tasks:

1. Continue to promote subsidiary regulations to ensure a smooth transition in the market: Actively assist the competent authorities in formulating the relevant subsidiary laws and regulations under the Special Law (including establishment regulations, personnel management rules, management regulations, internal control system handling guidelines, abnormal transaction management regulations, outsourcing operation regulations, financial report preparation standards, etc.). Through three major committees—“Listing and Delisting Review,” “Discipline,” and “Prevention of Financial Fraud, Money Laundering, and Compliance”—the VASP Association will guide industry operators to operate smoothly during the transition period and reduce market impact.

2. Align with international standards, protect investors, and strengthen overseas platform management: Introduce mechanisms that meet international standards, including anti-money laundering, cybersecurity control, investor protection, and market order maintenance. In line with international regulatory trends, establish clear bases for management and law enforcement for overseas virtual asset platforms that provide services to or solicit business from our nationals without authorization, in order to avoid regulatory arbitrage and prevent risk spillover. At the same time, through the specialized-law system, promote the integrated development of virtual assets and the mainstream financial system, creating a safe, trustworthy, and internationally competitive digital finance environment.

3. Strengthen cross-border coordinated anti-fraud prevention and demonstrate social responsibility in combating fraud: Connect the prosecutors’ offices, police and investigative authorities, competent authorities, financial institutions, and compliant VASP operators to establish more timely and closer information sharing, suspicious transaction reporting, and anti-fraud coordinated prevention mechanisms. Through on-chain transaction trail analysis, risk address identification, abnormal transaction monitoring, and fund-flow assistance and cooperation mechanisms, we will work together to help prevent and block fraudulent funds, improve the overall effectiveness of financial crime prevention, and safeguard the safety of the public’s assets.

Looking ahead, the VASP Association will continue to work with all sectors to help Taiwan become an important base with both innovative capacity and regulatory resilience. The VASP Association also once again thanks the legislators across party lines of the Legislative Yuan for coming together to vigorously promote this bill and support the long-term, sound and healthy development of the industry.

Further Reading
Virtual Asset Service Act Passed Third Reading! Taiwan’s Crypto New Era Has Arrived—Stepping Toward a Comprehensive Licensing System
Virtual Asset Service Act Passed Third Reading! Three Major Regulatory Highlights in One Look—Lawmakers: Expected to Increase Competitiveness