Taiwan's OTC trading is completely illegal! Experts say the new regulations from the Financial Supervisory Commission are "beyond saving": VASP licenses have become a poison, scaring all customers away.

Taiwan's FSC Securities and Futures Bureau issued new rules banning cash transactions, causing an outcry between the industry and the society, and experts are worried that VASP licensees will lose a large number of customers, and innovators will also leave Taiwan. (Summary: Financial Regulatory Commission: Virtual asset exchanges prohibit "cash transactions"!) Only traceable cash flows such as bank remittances are allowed) (Background supplement: The FSC stressed that "Taiwan exchanges should thoroughly investigate money laundering" and expand financial inspections; The association urges cooperation with regulation ) Taiwan's FSC has been shouting last year to crack down on fraud to manage virtual asset operators in four stages, rushing to send the virtual asset law bill to the Legislative Yuan before June this year, causing public resentment and social outcry, and now the FSC Securities and Futures Bureau has issued new regulations to completely prohibit virtual asset operators from trading in cash, industry experts pointed out that this is completely out of touch with the international trend, I am afraid that it will suppress virtual asset business opportunities and innovation, and the public will also turn to overseas or underground trading due to highly regulated low liquidity. Let regulation lose its substance. Securities and Futures Bureau promulgated new regulations The FSC Securities and Futures Bureau today issued new regulations for Taiwanese VASP operators, although no official documents have yet been obtained, but the moving area has contacted the Securities and Futures Bureau to confirm the news, mainly the following four points: Mandatory regulation of all virtual currency operators (exchanges) that have entered the registration list in China to comply with Customers cannot use cash to buy and sell cryptocurrencies, and in the past, these cash customers mainly traded through the physical stores of the exchange, or large cash customers and the exchange separately agreed on the trading time and place. The old general network trading customers are not affected, because the cash flow is through the bank. The main reason is that in fraud cases, breakpoints often occur when cash is traded for cryptocurrencies, which is difficult to trace. Total ban on OTC and P2P transactions? It must be reminded that in November last year, the FSC took the lead in amending the Money Laundering Prevention Law and related regulations, which defines that transactions "for others" that are not registered as VASP dealers are violations of the Money Laundering Prevention Law and are punishable by up to seven years in prison. A few days ago, the district contacted experts to explain that the amendment of the law will greatly limit the feasibility of private P2P transactions and draw all private transactions into the red line. Today's new regulations of the FSC announced that even if you have a VASP license, you cannot operate offline buying and changing shops, bitcoin ATMs and other businesses, which is like a complete ban on offline transactions between the private sector and institutions and virtual assets such as bitcoin. Expert and private reactions In response to the latest regulations of the FSC, a former exchange anonymous operator with 7 years of experience in the industry said that the FTC's comprehensive ban on OTC transactions "will definitely happen", because OTC in addition to illegal money laundering purposes, in fact, is also an important risk control and liquidity maintenance means for market makers and exchanges in the industry, and at the investment level, it is also the mainstream channel for venture capital to invest in emerging projects, so the FSC fully blocks OTC transactions. In fact, it is completely detrimental to the development of domestic virtual asset operators, and large customers to retail investors may "run when they see a Taiwan license": The officials of the FSC I guess because of the recent offline exchange money laundering case, so this regulation was promulgated, but in fact they simply got a lot of things wrong, the first OTC transaction in finance and the economy itself is a natural liquid tool, first talk about the fiat currency part, some companies with high risk of their own business, They will keep a lot of cash in their internal vaults as an emergency (such as Nintendo of Japan), should you control them to restrict them from trading privately? Is that breaking their wings to survive and maintain business liquidity? Back to the virtual asset industry, market makers, project parties, and exchanges, often when the price fluctuates sharply, use OTC trading positions to maintain liquidity, then your financial management will do such restrictions, requiring the industry to comply with the risk control in full, the problem is that the legal compliance process may not be completed, the exchange will encounter a liquidity bankruptcy crisis, and restrictions are not allowed to do OTC trading, then in fact, I guess local operators should face a run, so the force of controlling people's deposits and withdrawals is more serious than ever. Now because of the delay in deposits and withdrawals, many customers have been lost to local licensed exchanges, and now it seems that they will only run away more, because customers are all involved in legal compliance costs and miss out on trading opportunities... Not to mention the venture capital people, they are all using over-the-counter transactions, using large amounts of money in exchange for future token promises, which is usually to avoid direct market volatility, but you ban this capital injection channel, there will be no VCs willing to take the Taiwan line to inject capital in the future, and the industry or new startups will all go to Singapore, Dubai and other overseas registration places in order to survive. In addition, Dong District also interviewed a 10-year coin OG "Ah Wei", and after the news appeared, he also submitted a letter to Dong District, believing that the FTC's OTC ban will make Taiwan's cryptocurrency innovation industry and trading function itself collapse: Where does the value of the token come from? You have to let people circulate freely, and the market will naturally present their value. But the question is how to prove the value of tokens that cannot be listed on compliant exchanges? If this is the case, the competent authorities will not allow you to trade in any over-the-counter way, which means that even if your token has economic value, there is no market to trade, which is completely a disguised restriction on coin innovation. As a "Taiwanese" company will become very unlucky, as long as it involves the issuance of new virtual assets, if you can't afford the listing fees for compliant exchanges (which are expected to be super expensive in the future), you will not be able to issue any tokens, which means that virtual assets under Taiwan's jurisdiction will be locked up in a closed sandbox with no innovative value. The most terrifying thing about this sandbox is that he can only have meat in this sandbox when overseas bitcoin and Ethereum rise, which means that the FSC is actually regulating it as a pure pang-style cage, ignoring the new value that may be brought by the innovation in this sandbox. Such a rule is not as free as the securities market, at least it will allow new companies to sell shares over the phone... Then I want to ask, what is the point of you opening this virtual asset market? Isn't it true that the authorities themselves want to be able to lock up the fraudsters in this way... With such strict regulations, if the public sees that the license plate approved by Taiwan's financial control committee will run away, will the fraudsters still keep it for you? This is an inverted statute. How should affected businesses react? In view of the fact that the regulation affects the public and traders a lot, and if the industry and the public are expected to be affected and have opinions on the law, they should express their views on the content and direction of the VASP special law as soon as possible before the promulgation of the special law, and express their views through the public opinion box of the FSC, which may be the only remedy channel at present. Experts also called on the government to hold a number of public hearings for the private sector before implementing the regulations, and listen to the opinions of the people, local companies, overseas operators and investors, so as to avoid the law becoming "fraudulent in name", but in fact it is a nuisance to the people and undermines innovation: Related reports Taiwan's FSC opens up "custody of bitcoin in the financial industry": 5 banks have expressed interest and will accept applications on New Year's Day next year MaiCoin and Currency Depository Exchange were each fined 1.5 million yuan by the FSC for violating the Money Laundering Prevention Law Combating Fraud" online "real-name advertising system" Implemented on New Year's Day next year, FSC: VASP registration system will be on the road at the end of the year 〈Taiwan OTC trading is all illegal! Experts shouted that the new regulations of the FSC are "helpless": VASP licenses turn into poison, scaring customers away" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".