Virtual Asset Service Provider Taiwan – What You Need to Know

When working with Virtual Asset Service Provider Taiwan, a licensed entity that offers crypto trading, custody, or related services under Taiwanese law. Also known as VASP Taiwan, it bridges the gap between digital asset innovation and regulatory oversight, ensuring users can trade safely while authorities keep an eye on illicit activity.

Licensing and Supervision

The Financial Supervisory Commission (FSC), Taiwan's financial regulator responsible for approving VASPs issues the core license that lets a platform operate legally. The FSC requires a solid business plan, proof of capital, and robust risk‑management procedures. Without this approval, any exchange or wallet service faces immediate shutdown and hefty fines. In practice, the licensing step also triggers the next requirement: compliance with anti‑money‑laundering standards.

Compliance centers on Anti‑Money Laundering (AML), a set of rules that force VASPs to monitor, report, and prevent suspicious transactions. AML policies in Taiwan mirror FATF recommendations, demanding ongoing transaction monitoring, real‑time screening against sanction lists, and detailed record‑keeping for at least five years. Failure to meet AML obligations can lead to license suspension, large penalties, or criminal prosecution for the operators.

Once licensed and AML‑compliant, a VASP can launch a full‑fledged cryptocurrency exchange or digital wallet service. Exchanges must integrate KYC checks at onboarding, enforce transaction limits based on user risk profiles, and provide clear audit trails for regulators. Digital wallets, whether custodial or non‑custodial, also fall under VASP rules when they hold user funds on behalf of clients, meaning they need secure storage solutions and insurance coverage for cyber‑theft.

Beyond exchanges and wallets, many VASPs expand into digital asset custody for institutional investors. Custody providers in Taiwan must demonstrate cold‑storage capabilities, multi‑signature controls, and periodic third‑party audits. This extra layer of security reassures banks and fund managers that their crypto holdings are protected against internal errors and external attacks.

The FSC also runs a regulatory sandbox that lets startups test innovative services—like tokenized securities or decentralized finance protocols—under relaxed rules before full deployment. Participants still need basic licensing, but the sandbox reduces barriers while still enforcing AML and KYC basics. This environment encourages homegrown fintech solutions that can later scale globally.

For businesses planning to become a VASP in Taiwan, the practical steps are clear: submit a detailed application to the FSC, set up AML software that flags high‑risk transactions, integrate KYC at user sign‑up, and choose a custody partner with proven security credentials. Ongoing reporting to the Financial Supervisory Commission ensures you stay in good standing and avoid costly enforcement actions.

Below you’ll find a curated set of articles that dive deeper into each of these areas—licensing hurdles, AML best practices, exchange operations, and custody strategies—so you can build a compliant, competitive crypto business in Taiwan.