Taiwan's self-regulatory guidelines for virtual assets! See the eight major impacts on operators and KOLs at once

VASP Self-Regulatory Rules officially released!

Taiwan's virtual asset industry is developing rapidly, but the accompanying trading risks and market order issues have also received much attention. To address this, the Taiwan Virtual Currency Business Association (TWVASP) has launched self-regulatory standards for virtual asset service providers (VASPs), aimed at strengthening investor protection and promoting healthy market development.

According to the specification, operators are required to adhere to the following core principles:

Investor Protection: Operators should provide a transparent fee structure to ensure that investors can clearly understand the costs of trading fees and other expenses. At the same time, they need to clearly disclose potential risks to avoid misleading marketing and ensure investors' right to know.

Asset security: Operators need to establish dedicated cold wallets and multi-signature mechanisms to protect user assets and prevent hacker attacks. In addition, the platform must ensure daily asset liquidity to avoid difficulties in user withdrawals due to insufficient fund scheduling.

Internal Governance: Regulatory requirements require operators to establish strengthened internal audit systems, including KYC (Know Your Customer) and AML (Anti-Money Laundering) measures, to ensure that all transactions are compliant and to prevent illegal funds from entering the virtual asset market.

Information Transparency: Clear regulations require operators to regularly disclose financial reports and internal control frameworks, enhancing market transparency and strengthening investor confidence.

The significance and challenges of promoting self-discipline regulations

The introduction of this self-regulatory framework is seen as an important step towards the maturity of Taiwan's virtual asset industry. The association stated that the framework will help the market establish a mechanism of trust, attract more international capital inflow, and promote Taiwan as the virtual asset center in the Asia region. However, the implementation of the self-regulatory framework also faces challenges, including ensuring that small businesses have the capability to implement the regulations and how to deal with the malicious competitive behavior of some platforms.

Experts point out that the rapid changes in the virtual asset market mean that regulations need to have a certain degree of flexibility to cope with the challenges brought by new technologies and market models. At the same time, the industry also looks forward to the government further improving the regulatory framework on the basis of self-discipline regulations, providing a clearer legal status and protection.

Overall, the release of self-regulatory rules for virtual assets in Taiwan is not only a positive safeguard for investors' rights and interests, but also demonstrates Taiwan's proactive determination to lead financial innovation in the digital economy era. Whether it can be truly implemented in the future requires cooperation among industry, government, and academia to jointly create a healthy, safe, and internationally competitive virtual asset market.

Key Points of Self-discipline Guidelines Cheat Sheet

If you're the kind of person who gets a headache from reading legal texts, you don't have to worry, 'Crypto City' has put together a cheat sheet for everyone:

Core Spirit

Protecting investors and maintaining market fairness

Main regulatory focus

1. Advertising restrictions

Prohibition of exaggeration and misleading:

Advertisements must not contain exaggerated, deceptive, or misleading content.

Do not predict the rise and fall of currency prices at will, nor can you promise guaranteed profits.

Prohibition of using exaggerative words such as "lowest", "best", "only", etc.

2. Investment Risk Disclosure

Risks must be clearly presented:

Advertisements must clearly explain investment risks and use clear and visible fonts.

Positive publicity must also report relevant risks to maintain balance.

3. Integrity operation

Based on honesty:

Do not plagiarize or confuse the names or brands of other businesses.

Investor privacy must be protected and actions that harm the reputation of peers are not allowed.

4. Strict examination of cross-industry cooperation

Advertising content must be legal:

It is strictly forbidden to cooperate with advertisements related to illegal content such as pornography, violence, and gambling.

Do not link to illegal websites or cooperate with illegal operators.

5. Platform responsibility

Provide comprehensive customer protection mechanisms:

A complete complaint channel needs to be established, and customer complaint records should be kept for at least 5 years.

Customer complaints must be handled promptly to ensure investor rights.

The key is to make virtual asset advertising more transparent and trustworthy, injecting a foundation of health and trust into the market!

Image source: 'Crypto City' mapping VASP guild customer protection self-discipline highlights cheat sheet

The influence of Taiwan KOL and internet celebrities

In the face of an increasingly stringent regulatory environment, virtual asset content creators and advertisers are facing unprecedented challenges. From avoiding exaggerated rhetoric to exposing market risks, from enhancing transparency to adapting to platform censorship, every step requires greater professionalism and responsibility. "Crypto City" also sorted out the possible impact for KOLs and influencers in Taiwan.

1. Content specifications are more stringent:

When creating content, avoid using misleading or exaggerated superlatives such as 'lowest', 'best', 'only'.

The content should avoid emphasizing returns and neglecting risks.

2. Risk disclosure becomes an obligation: When promoting virtual assets, it is necessary to explain risks such as market volatility and legal uncertainty, and not just emphasize high returns.

3. Increase legal and reputational risks: Non-compliance may lead to legal accountability or reputational damage, especially when cooperating with non-compliant advertisers.

4. Cooperation opportunities may be limited: Cooperation with overseas platforms that have not completed anti-money laundering statements or do not comply with regulations may be limited.

5. The need to increase trust and transparency: The audience's demand for the authenticity of content has increased, and KOLs need to enhance transparency to maintain trust.

6. Reduced advertising revenue risk: Due to stricter regulations, some advertisers may reduce their advertising budgets, affecting a source of income.

7. The need to enhance professional capabilities: the need to master basic knowledge of virtual assets and correctly interpret regulations to avoid inadvertent breaches of the law.

8. Strengthening platform monitoring: Social platforms may enhance the review of virtual asset content, and violating content may be taken down or banned.

Suggestions for 'Cryptotown'

If you are concerned about touching on regulatory issues, "Crypto City" has also compiled three suggestions for content creators.

1. Improve professional knowledge: strengthen the basic knowledge related to virtual assets to ensure the content is legal and compliant.

2. Hire legal counsel: Conduct professional review of cooperative advertising content to avoid legal risks.

3. Focus on educational content: Build a professional image through educational content to reduce purely sales-oriented promotion.

Image source: 'Crypto City' mapping VASP Guild Client Protection Self-discipline Norms and its impact on KOL

The 'Taiwan Virtual Asset Self-Regulatory Norms Cheat Sheet! A comprehensive look at the eight impacts on operators and KOLs' This article was first published on 'Cryptocurrency City'