Taiwan Opens Access to Foreign Crypto ETFs for Professional Investors

Taiwan’s Financial Supervisory Commission (FSC) has announced that professional investors can now invest in foreign cryptocurrency exchange-traded funds (ETFs).

These investors, including institutional players, high-net-worth individuals, and other high-asset clients, will be allowed to participate through a method known as “re-entrustment.” This process will enable them to access foreign crypto ETFs via Taiwanese securities firms.

Crypto ETFs Limited to Professional Investors

The decision, reviewed by the Securities Business Association of the Republic of China, restricts access to professional investors. This is based on the high level of risk involved in virtual asset investments, which can exhibit significant price volatility. Taiwan’s regulatory framework aims to ensure that only those with sufficient financial resources and expertise are able to invest in these high-risk products.

Securities firms facilitating these investments are responsible for verifying whether an investor meets the qualifications required to participate. This involves evaluating experience, knowledge, and capacity to manage the risks associated with crypto ETFs. Firms are also required to provide regular staff training on these financial products to ensure their employees are knowledgeable when handling client investments.

In light of past issues such as the FTX collapse and local fraud, Taiwan tightened its regulations on virtual asset service providers (VASPs). As of July, the FSC requires all VASPs to register for Anti-Money Laundering (AML) compliance under the Money Laundering Control Act. This regulation applies to both local firms and offshore companies that want to offer crypto-related services in Taiwan. Without this registration, companies are not allowed to do business in the country.

In addition to AML compliance, the FSC imposed requirements for operational transparency and consumer protection. VASPs must submit a compliance declaration to demonstrate their adherence to these rules, especially those aimed at preventing money laundering.

Tax Requirements for Crypto Transactions

In Taiwan, crypto transactions are subject to a 5% Value Added Tax (VAT). Both residents and companies involved in the sale of virtual assets must register for tax purposes unless their monthly sales fall below NT$40,000 (approximately $1,300). This regulation applies to both individuals and businesses, ensuring that virtual asset transactions are properly accounted for in Taiwan’s tax system.

These steps by the FSC indicate Taiwan’s cautious approach to managing the risks associated with the growing virtual asset market while allowing qualified investors access to crypto ETFs.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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