Woofun AI reports that Taiwan’s Legislative Yuan has enacted the Virtual Asset Service Act, establishing a comprehensive regulatory framework for the cryptocurrency sector. The legislation mandates that Virtual Asset Service Providers (VASPs) secure approval from the Financial Supervision Administration prior to operations, adhering to strict internal control, cybersecurity, and business continuity standards. Existing entities with anti-money laundering registration have 12 months to apply for licenses and 21 months for regulatory approval.

Stablecoin issuers must maintain segregated reserves held by domestic financial institutions, which are protected from creditor claims during insolvency. Issuers face regular audits and are prohibited from offering interest or returns to holders. Unauthorized VASP operations or stablecoin issuance carry penalties of up to seven years imprisonment and NT$100 million fines. Fraud or market manipulation offenses result in three to ten years imprisonment and fines ranging from NT$10 million to NT$200 million. A non-binding resolution also urges the Financial Supervision Administration to propose a plan within one year for cryptocurrency derivatives offerings.