December 30, 2024
By Joe Pan
Taiwan’s cryptocurrency industry faces a new regulatory landscape as the Taiwan Securities Association (TSA) issues its first warning to a Crypto KOL for promoting “cryptocurrency trading education” without proper authorization.
This action comes just weeks after the Securities and Futures Bureau (SFB) officially opened applications for Virtual Asset Service Provider (VASP) registration on November 26, 2024, marking a crucial step in implementing the country’s new anti-money laundering (AML) regulations for the crypto sector.
The warning, issued on December 17, 2024, targets Yang Ji (Phonic translation) Limited Company or 洋稽有限公司 in Chinese, operating under the Facebook account “Crypto Hu Shi” (加密胡適). The company was found to be conducting virtual currency platform business solicitation activities without completing the required anti-money laundering compliance declaration to the competent authority.
In response to the warning, Crypto Hu Shi released an official response via Facebook on December 18, 2024. Here’s a translation of key points from their announcement:
“After contacting the Financial Supervisory Commission (FSC), we learned that the Taiwan Securities Association is not a government organization. Anyone can report to this association, which may lead to a public announcement, but it has no legal effect.
We have searched the FSC and Securities and Futures Bureau’s official websites for ‘Yang Ji Limited Company’ or ‘Crypto Hu Shi,’ and found no mention of us. In contrast, when searching for a company recently penalized by the FSC, clear penalty details were available.
We are legal, tax-paying educational service providers, not cryptocurrency platform operators or currency dealers. It’s important to clarify this distinction.
As of February 3, 2025, we will stop recruiting new members for our live streaming group. Existing members’ rights will not be affected. In the future, live streaming services will be incorporated into our advanced class as an added value.”
The TSA, founded on February 23, 1956, has a long history of regulating Taiwan’s securities industry. It evolved into a national association in 2008, consolidating resources and joining international securities organizations. “The association serves as a crucial bridge between authorities and securities dealers, promoting industry growth while ensuring compliance with regulatory requirements,” noted Chen Chun-Hong, Chairman of TSA, in the greeting posted on the association’s website.
This recent warning demonstrates the TSA’s commitment to enforcing the new regulations, which require all VASPs, including overseas companies, to register with Taiwan’s Financial Supervisory Commission (FSC) by September 30, 2025. The regulations broadly define “virtual asset services” to include exchanges between virtual currencies and fiat currencies, transfers of virtual currencies, and financial services related to the issuance or sale of virtual currencies.
The Financial Supervisory Commission (FSC) advises the public to refrain from engaging in virtual currency transactions and trading services with unlicensed operators and to avoid transferring funds to accounts provided by the company. The FSC also directs the public to consult the list of operators who have completed anti-money laundering compliance declarations and are still allowed to provide virtual asset services on the Securities and Futures Bureau’s website.
Kevin Cheng, a compliance specialist and VASP regulation-focused lawyer at the law firm of Lee, Tsai & Partners, commented on the significance of this warning: “This swift action by the TSA, coming immediately after the November 26 announcement of VASP registration and AML regulations, sends a clear message about the seriousness of compliance in Taiwan’s crypto sector. It demonstrates that authorities are actively monitoring the market and are prepared to take action against unauthorized operators, even those operating primarily through social media platforms. However, this case also highlights the potential confusion and gray areas in the new regulations, calling for better education and follow-up from both industry associations and regulators to ensure all participants fully understand their obligations.”
This enforcement action underscores Taiwan’s commitment to creating a regulated and transparent environment for cryptocurrency operations. It serves as a reminder to all crypto-related businesses, including educational platforms and influencers, of the importance of complying with the new regulatory framework.
As Taiwan continues to align its cryptocurrency regulations with other jurisdictions in the region, this first warning to the Crypto KOL highlights the potential for misunderstandings or misclassifications in this evolving regulatory landscape. As the crypto industry continues to develop, it’s clear that there’s a need for ongoing dialogue between regulators, industry participants, and educational providers to ensure that regulations are applied appropriately and effectively.
About the Author
Joe Pan is an editor at Blockwind News and an early adopter of blockchain technology. He has covered major crypto conferences globally since 2019 and frequently moderates Web3 events across Asia. Joe is part of the founding team of NFTMetta and Blockwind News.
