Taiwan a step closer to establishing crypto regulation

Taiwan Financial Supervisory Commission’s draft crypto policy contains 13 regulatory principles, according to ABmedia.
According to the new regulations, the issuance of crypto assets will be allowed, however, the issuance of stablecoins has not gained approval.
MiCA approval in the European Union is acting as a catalyst, pushing smaller nations to legitimize cryptocurrencies, such as Taiwan, which has less than a million users.

Taiwan's Financial Supervisory Commission (FSC) has come up with a draft of guiding principles through which it hopes to provide customer protection from the "existing" perspective of money laundering prevention and supervision, according to a report in ABmedia.

Crypto asset providers will be allowed to issue tokens provided they fully disclose whitepapers for the assets. Service providers will not be able to issue stablecoins under any circumstances.

Taiwan cryptocurrency users

Crypto service providers will also not be allowed to publish any advertisement in the country without registering with the authorities first. The FSC has also taken a strict stance against derivative transactions, deeming them illegal and a punishable offense, sending offenders for up to seven years in prison.

Europe leads the way when it comes to rules of the game

While not stated explicitly, Taiwan's crypto adoption certainly has been influenced by the European Union, which approved its crypto regulations bill earlier this year. The Markets in Crypto Assets (MiCA) bill will come into effect in the coming years, but its approval is encouraging many countries to accept the digital asset market.

Back in June this year, the United Kingdom also passed the Financial Services and Markets Bill (FSMB) following the EU. This opens cryptocurrencies up to significantly more investment in the coming years as small countries like Taiwan, which have less than a million crypto users, are welcoming the new form of currency.

SEC vs Ripple lawsuit FAQs

Is XRP a security?

It depends on the transaction, according to a court ruling released on July 14:

For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.

How does the ruling affect Ripple in its legal battle against the SEC?

The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.

While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and will need to keep litigating over the around $729 million it received under written contracts.

What are the implications of the ruling for the overall crypto industry?

The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at.

Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say.

Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to persist.

Is the SEC stance toward crypto assets likely to change after the ruling?

The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation.

While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.

Can the court ruling be overturned?

The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.

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