The formulation of special laws on virtual asset management (VASP) finally has a clear process. Peng Jinlong, chairman of the Financial Supervisory Commission, reported to the Finance Committee that the management of virtual asset operators will be gradually promoted in four stages, and plans to propose a draft special law at the end of 2024. The draft is expected to be completed and submitted to the Academy for review by June 2025.
The Financial Supervisory Commission publicly confirmed the special law for the first time
This is the first time that the Financial Supervisory Commission has publicly revealed in detail the timetable and plan for establishing a special law for virtual asset management. The special law will be formulated with reference to international supervision standards, focusing on six major supervision points, including business licensing conditions, consumer protection, capital requirements, asset management, market transaction behavior standards and business development.
The first stage: hosting virtual asset operators
In the first stage, the Financial Supervisory Commission will start with the money laundering prevention measures for virtual asset service providers (VASPs) and begin to regulate related businesses. At present, 25 operators have completed compliance statements, and their business types include exchanges, trading platforms, physical stores, virtual asset automated teller machines (BTM) and custody system providers.
The second stage: establishing a trade union and formulating self-regulatory regulations
The second phase will promote VASPs to establish guilds and formulate self-regulatory regulations. The SBA will formulate self-regulatory standards based on the eight guiding principles set by the Financial Supervisory Commission. It is expected that on Thursday (13th), VASP will officially establish a guild.
The third stage: Strengthening money laundering prevention and legal management
In the third stage, the Financial Supervisory Authority will add a VASP registration system to the Money Laundering Prevention Law, clearly define VASP and impose criminal liability on illegal operators. VASPs that fail to register and engage in business in accordance with regulations will be sentenced to up to two years in prison and fined 5 million yuan. The Financial Supervisory Commission plans to conduct differentiated management of registered VASPs based on business complexity.
VASPs operating as exchanges must follow the most complete internal control regulations, including description of matching transaction rules, information system construction (must comply with ISO27001 information security regulations), wallet management (at least half of the positions must be cold wallets), and platform and customer Separation of assets.
Currently, among the 25 VASPs that have completed the money laundering prevention compliance statement, such as ACE, Token Trust, MaiCoin, XREX, HOYA, etc., they are all exchange types and must follow complete specifications.
The fourth stage: formulating special laws
The final stage will be towards the enactment of special legislation. The Financial Supervisory Authority will outsource a study on VASP management laws in January 2024, and determine six major supervision priorities with reference to national and international norms. The research team is expected to submit a final report at the end of September 2024, and propose a draft special law and hold a public hearing at the end of the year. The Financial Supervisory Commission plans to submit the draft special law to the Yuan Council for review by June 2025.
This time, the Financial Supervisory Commission clearly revealed for the first time the plan to promote special laws on virtual asset management, showing that the government attaches great importance to the virtual asset market. With the gradual formulation and implementation of special laws, the market is expected to usher in a more standardized and safer development environment to further protect the rights and interests of investors.
This article Special law on virtual asset management is coming: The Financial Supervisory Commission announced a four-phase management plan, which will be sent to the Legislative Yuan in June 2025. It first appeared on Lian News ABMedia.
