Presidential Order Promulgating the Virtual Asset Service Provider Act

Virtual Asset Service Provider Act Republic of China, July 22, 115 Order No. Hua Zong Yi Jing Zi No. 11500067161

Chapter 1 General Provisions

Article 1 This Act is enacted to promote the sound operation and development of virtual asset businesses, enhance the management of virtual asset services and trading markets, protect the rights and interests of virtual asset traders, foster fintech innovation, and promote innovative applications of virtual assets.

Article 2 The competent authority for this Act is the Financial Supervisory Commission.

Article 3 The terms used in this Act are defined as follows:

1. Virtual Asset: Refers to value represented by cryptography and distributed ledger technology or other similar technologies, which can be stored, exchanged, or transferred digitally, and is used for payment or investment purposes. It does not include the following assets: (1) Digital forms of New Taiwan dollars, foreign currencies, and currencies issued in mainland China, Hong Kong, or Macau; securities; and financial assets issued pursuant to other laws. (2) Non-fungible tokens representing unique value.
2. Issuance: Refers to the act of creating and offering virtual assets for consideration within the territory of the Republic of China to unspecified persons or a specific majority of persons.
3. Trader: Refers to one who engages in the exchange, transfer, custody, subscription, lending, or other transaction types approved by the competent authority regarding virtual assets.
4. Client: Refers to one who receives the services listed in Paragraph 1 of Article 6 provided by a virtual asset service provider.
5. Overseas Virtual Asset Service Provider: Refers to a virtual asset service provider organized and registered under overseas laws for profit-making purposes.
6. Stablecoin: Refers to a virtual asset that represents a link to the value of one or more fiat currencies to maintain its value stability.
7. Wallet: Refers to an application or device used to store the cryptographic keys required to use virtual assets.

Article 4 To promote inclusive finance and the development of fintech, innovation experiments for virtual asset businesses may be applied for and conducted by entities other than virtual asset service providers, pursuant to the Regulations Governing Fintech Development and Innovation Experiments. During the period and scope approved by the competent authority for such innovation experiments, the provisions of this Act shall not apply. The competent authority shall review the appropriateness of this Act and related financial regulations based on the conduct of the innovation experiments mentioned in Paragraph 1.

Article 5 To promote international cooperation between the virtual asset competent authorities of the Republic of China and other countries, the competent authority or its authorized agencies, institutions, or organizations may, based on the principle of reciprocity, sign cooperation treaties, agreements, or protocols with foreign governments, institutions, or international organizations regarding matters such as information exchange, technical cooperation, and assistance in investigations. Except where it would harm national interests or the rights and interests of the general public, the treaties, agreements, or protocols signed by the competent authority pursuant to the preceding paragraph may request relevant agencies or require relevant institutions, legal persons, organizations, or natural persons to provide necessary information pursuant to such treaties, agreements, or protocols, and provide them to foreign governments, institutions, or international organizations with which the Republic of China has signed such treaties, agreements, or protocols, based on the principles of reciprocity and confidentiality.

Chapter 2 Virtual Asset Service Providers

Article 6 Operating virtual asset businesses pursuant to this Act refers to providing the following services for others within the territory of the Republic of China as a business:

1. Exchange between virtual assets and New Taiwan dollars, foreign currencies, and currencies issued in mainland China, Hong Kong, or Macau, and related services.
2. Exchange between virtual assets and related services.
3. Transfer of virtual assets and related services.
4. Custody or management of virtual assets or tools used to control virtual assets, and related services.
5. Issuance or sale of virtual assets and related services.
6. Acquisition of virtual assets with an agreement to return or pay the same or higher quantity or value of virtual assets, and related services.
7. Other virtual asset services approved by the competent authority. Operating any of the businesses listed in the preceding paragraph constitutes a virtual asset service provider, classified according to the following categories:
8. A virtual asset service provider operating the business listed in Item 1 or 2 of the preceding paragraph is a Virtual Asset Exchange Provider.
9. A Virtual Asset Exchange Provider operating a virtual asset centralized trading market business is a Virtual Asset Trading Platform Provider.
10. A virtual asset service provider operating the business listed in Item 3 of the preceding paragraph is a Virtual Asset Transfer Provider.
11. A virtual asset service provider operating the business listed in Item 4 of the preceding paragraph is a Virtual Asset Custodian.
12. A virtual asset service provider operating the business listed in Item 5 of the preceding paragraph is a Virtual Asset Underwriter.
13. A virtual asset service provider operating the business listed in Item 6 of the preceding paragraph is a Virtual Asset Lender.
14. A virtual asset service provider operating the business listed in Item 7 of the preceding paragraph is another type of Virtual Asset Service Provider.

Article 7 Virtual asset service providers shall, according to the categories specified in Paragraph 2 of the preceding article, obtain permission from the competent authority and be issued a license before commencing business; those without permission and a license shall not operate the respective virtual asset businesses, unless otherwise stipulated by the competent authority. If a virtual asset service provider establishes branch offices or automated service equipment, it shall obtain permission or approval from the competent authority. If an overseas virtual asset service provider establishes a branch office within the territory of the Republic of China, it shall obtain permission from the competent authority and be issued a license. Financial institutions may, with permission from the competent authority, concurrently engage in virtual asset businesses and serve as virtual asset service providers under this Act. The measures regarding the establishment conditions, procedures for applying for permission or approval, documents to be attached, revocation of permission or approval, qualification conditions for financial institutions to concurrently engage in business, types of businesses operated, and other related matters for the virtual asset service providers mentioned in the preceding four paragraphs and their branch offices and automated service equipment shall be formulated by the competent authority.

Article 8 Virtual asset service providers shall, unless otherwise stipulated by the competent authority, operate businesses within the scope approved by the competent authority; adding new virtual asset businesses or operating other businesses shall require approval from the competent authority. Relocation, abolition, commencement, suspension, resumption, cessation, dissolution, and changes in business scope of virtual asset service providers shall be approved by the competent authority. The measures regarding the management of business and finances, conditions and procedures for applying for approval, documents to be attached, revocation of approval, and other matters to be complied with for virtual asset service providers mentioned in the preceding two paragraphs shall be formulated by the competent authority. Where the management of business and finances of the virtual asset service providers mentioned in the preceding paragraph involves matters under the jurisdiction of the Central Bank, it shall be determined in consultation with the Central Bank.

Article 9 The organization of virtual asset service providers shall be limited to joint stock companies. However, this limitation does not apply to overseas virtual asset service providers establishing branch offices pursuant to Paragraph 3 of Article 7, financial institutions concurrently engaging in virtual asset businesses pursuant to Paragraph 4 of Article 7, or other organizational forms approved by the competent authority.

Article 10 The name of a virtual asset service provider shall indicate the word "virtual asset." However, this requirement does not apply to those concurrently engaging in virtual asset businesses pursuant to Paragraph 4 of Article 7. Non-virtual asset service providers shall not use the name mentioned in the preceding paragraph or any name likely to cause confusion that they are virtual asset service providers.

Article 11 Virtual asset service providers shall have a minimum amount of capital or allocated operating funds, the amount of which shall be determined by the competent authority. Before commencing business, virtual asset service providers shall deposit an operational guarantee fund with a financial institution designated by the competent authority, the amount of which shall be determined by the competent authority. Creditors of debts arising from the virtual asset business of a virtual asset service provider shall have priority in compensation from the operational guarantee fund mentioned in the preceding paragraph. If the operational guarantee fund falls below the amount stipulated in Paragraph 2 due to the fulfillment of the responsibility mentioned in the preceding paragraph, it shall be replenished.

Article 12 The rules regarding the qualification conditions, code of conduct, training, and other matters to be complied with for the persons in charge and business personnel of virtual asset service providers shall be formulated by the competent authority. Those who do not meet the qualification conditions stipulated in the rules mentioned in the preceding paragraph shall not serve as persons in charge or business personnel of virtual asset service providers; those already serving shall be removed by the competent authority. Those who have been convicted of crimes involving virtual asset fraud, money laundering, or violations of this Act, and whose sentences have not yet been executed, are not yet completed execution, or have been completed, expired probation, or pardoned, but less than five years have passed, shall not serve as persons in charge of virtual asset service providers; those already serving shall be removed by the competent authority.

Article 13 The total external liabilities of a virtual asset service provider shall not exceed a certain multiple of its net worth; its total current liabilities shall not exceed a certain proportion of its total current assets. However, this does not apply to financial institutions concurrently engaging in virtual asset businesses pursuant to Paragraph 4 of Article 7. The certain multiple and proportion mentioned in the preceding paragraph shall be determined by the competent authority.

Article 14 Virtual asset service providers shall establish internal control and audit systems; the objectives, principles, policies, operating procedures, and other matters to be complied with for these systems shall be governed by guidelines formulated by the competent authority. Virtual asset service providers shall establish information security management systems, operational information management and confidentiality policies, and business continuity policies, and take appropriate measures and procedures; the measures for this shall be formulated by the competent authority, and when necessary, in consultation with the Ministry of Digital Affairs or relevant agencies.

Article 15 Where virtual asset service providers entrust others to process operations, they shall establish internal operating systems and procedures regarding the scope of entrusted matters, protection of client rights and interests, risk management, and internal control principles; the measures for this shall be formulated by the competent authority. Where virtual asset service providers entrust others to process operations, if the entrusted institution or its employees cause damage to client rights and interests through intent or negligence, the virtual asset service provider shall still bear the same liability to clients according to law.

Article 16 Virtual asset service providers providing virtual asset services shall adhere to the principles of fairness, reasonableness, good faith, and diligence, fulfilling the duty of care of a good manager and the duty of loyalty.

Article 17 Unless otherwise provided by other laws or the competent authority, virtual asset service providers shall keep confidential client data, transaction data, and other related data. The competent authority may order virtual asset service providers to formulate written confidentiality measures for the data mentioned in the preceding paragraph and disclose important matters regarding these confidentiality measures via the internet or methods designated by the competent authority.

Article 18 Assets held by virtual asset service providers for clients and their own property shall be kept separate in the manner prescribed by the competent authority. Creditors of virtual asset service providers shall not make any claims or exercise other rights against the client assets held by the virtual asset service provider. When a virtual asset service provider goes bankrupt, the client assets it holds do not belong to its bankruptcy estate. Except for disposing of client assets according to client instructions, offsetting fees and debts owed by clients to them according to law, or other reasons permitted by the competent authority, virtual asset service providers shall not utilize or instruct financial institutions to utilize client assets.

Article 19 For the receipt and payment of fiat currencies involved in virtual asset businesses, virtual asset service providers may, with client consent, retain client fiat currencies in dedicated deposit accounts of the same currency opened by the virtual asset service provider at financial institutions. Virtual asset service providers shall place the client fiat currencies retained in the preceding paragraph into trust or obtain full performance guarantees from banks. Virtual asset service providers retaining client fiat currencies in accordance with the preceding two paragraphs shall apply mutatis mutandis the provisions of Paragraphs 3 and 4 of Article 26 regarding measures.

Article 20 Virtual asset service providers shall not refuse clients' requests to withdraw or transfer their assets. However, this does not apply if prohibited by other laws or in special circumstances meeting the requirements of the competent authority. For clients suspected of illegal activities or exhibiting obviously abnormal transactions, virtual asset service providers may suspend the transfer in, withdrawal, or transfer out of their assets, or suspend all or part of their trading functions. The criteria for identifying clients with suspected illegal or obviously abnormal transactions, procedures for suspending transfers in, withdrawals, transfers out, or trading, and other matters to be complied with shall be governed by measures formulated by the competent authority.

Article 21 The competent authority may impose restrictions on the total amount of virtual assets lent by virtual asset service providers, individual lending limits per virtual asset, and lending to related parties or affiliated enterprises; the measures regarding restriction amounts, lending transaction norms, the scope of related parties and affiliated enterprises, and other matters to be complied with shall be formulated by the competent authority.

Article 22 Virtual asset service providers shall regularly report and announce financial reports audited or reviewed by certified public accountants. The content, scope of application, operating procedures, preparation, audit or review, reporting procedures, reporting periods, announcement items, placement, preservation, and other matters to be complied with for the financial reports mentioned in the preceding paragraph shall be governed by measures formulated by the competent authority, and the provisions of Chapters 4, 6, and 7 of the Commercial Accounting Act shall not apply.

Article 23 Financial, business, or other information of virtual asset service providers shall be disclosed and reported to the competent authority; the measures regarding the methods, items, scope, timing, and other matters to be complied with for disclosure and reporting shall be formulated by the competent authority. Virtual asset service providers shall retain records related to virtual asset services provided to clients for inspection. The retention of service records mentioned in the preceding paragraph shall be maintained for five years from the termination of the service relationship. However, in case of disputes, they shall be retained until the dispute is resolved. The measures regarding the scope of application, procedures, and methods for retaining relevant records mentioned in the preceding paragraph shall be formulated by the competent authority.

Article 24 Virtual asset exchange providers shall ensure that the virtual assets for which they provide exchange services have offering circulars that comply with the requirements of the competent authority before providing services, and shall announce the offering circulars of such virtual assets. However, this does not apply if otherwise stipulated by the competent authority or if any of the following circumstances exist:

1. The issuance of the virtual asset is gratuitous.
2. The issuance of the virtual asset serves as labor remuneration for maintaining the operation of its distributed ledger or verifying its transactions.

Article 25 Virtual asset trading platform providers shall establish review criteria and procedures for the listing and delisting of virtual assets; the measures regarding the formulation of review criteria and procedures and other matters to be complied with shall be formulated by the competent authority. Virtual asset trading platform providers shall report to the competent authority for record-keeping the virtual assets for which they provide centralized trading market services; the rules regarding the procedures, conditions, revocation, and other matters to be complied with for the record-keeping of virtual assets by virtual asset trading platform providers shall be formulated by the competent authority. Virtual asset trading platform providers shall establish mechanisms to prevent unfair market trading and measures such as alerts for abnormal price and volume fluctuations.

Article 26 The property rights of client virtual assets held by virtual asset custodians belong to the clients, and virtual asset custodians shall not agree with clients to transfer property rights to the virtual asset custodian. Virtual asset custodians receiving virtual assets from clients shall not mix them with their own virtual assets. Virtual asset custodians shall set up frequent and regular reconciliation measures for the client assets they hold and appoint certified public accountants to issue reports; such reports shall be reported to and announced by the competent authority. The measures regarding the types of reports, reporting procedures, announcement items, placement, preservation, and other matters to be complied with for the reports mentioned in the preceding paragraph shall be formulated by the competent authority.

Article 27 Where virtual asset custodians entrust others to hold client virtual assets, such others shall be limited to virtual asset custodians permitted by the competent authority. In the case mentioned in the preceding paragraph, virtual asset custodians shall inform clients. If the entrusted institution or its employees cause damage to client rights and interests through intent or negligence, the virtual asset custodian shall still bear the same liability to clients according to law.

Article 28 Virtual asset underwriters shall ensure that the virtual assets for which they provide issuance or sales and related services have offering circulars that comply with the requirements of the competent authority before providing services, and shall announce the offering circulars of such virtual assets. However, this does not apply if any of the circumstances stipulated in the proviso of Article 24 exist. Virtual asset underwriters shall establish review criteria and procedures for the virtual assets for which they provide issuance or sales and related services; the measures regarding the formulation of review criteria and procedures and other matters to be complied with shall be formulated by the competent authority.

Chapter 3 Industry Association of Virtual Asset Service Providers

Article 29 Virtual asset service providers shall not operate unless they join the industry association. The industry association shall not refuse the admission of virtual asset service providers without just cause, nor attach improper conditions to their admission. The establishment, organization, and supervision of the industry association shall be governed by the Commercial Group Act, except as otherwise provided in this Act.

Article 30 The industry association shall formulate its articles of association based on the purposes of promoting the sound operation and development of virtual asset businesses, protecting the order of the virtual asset trading market, coordinating industry self-discipline, and promoting innovation in the virtual asset industry; the rules regarding matters to be recorded in the articles of association, supervision matters, qualification conditions for persons in charge and business personnel, finances, business, and other matters to be complied with shall be formulated by the competent authority. To exert self-disciplinary functions and cooperate with the development of virtual asset businesses, the industry association may collect necessary expenses from its members beyond those stipulated in the Commercial Group Act; the types and rates thereof shall be drafted by the industry association and submitted to the competent authority for record.

Article 31 When the competent authority deems it necessary to protect public interests or the rights and interests of traders, it may order the industry association to change its articles of association, rules, resolutions, or provide reference or report materials, or perform other specific acts. If directors or supervisors of the industry association violate laws, fail to implement the association's articles of association or rules, abuse their powers, or violate the principle of good faith, the competent authority may correct them or order the industry association to remove them.

Article 32 The industry association may take necessary actions against members and their representatives who violate the articles of association, rules, self-discipline covenants, relevant business self-discipline norms, or resolutions of the member assembly or board of directors, in accordance with the provisions of the articles of association. The industry association shall establish member self-discipline covenants and appeal procedures for disciplinary actions, submit them to the member assembly for passage, and implement them after approval by the competent authority; amendments shall follow the same procedure.

Article 33 The industry association shall regularly conduct educational and promotional activities for virtual asset service providers, clients, or the public. The industry association shall assist virtual asset service providers in conducting education and training for their persons in charge and business personnel. When necessary, the industry association may conduct education and training.

Chapter 4 Issuance and Management of Stablecoins

Article 34 Issuing stablecoins within the Republic of China shall require the issuer to apply for permission from the competent authority. Before granting permission for the preceding paragraph, the competent authority shall consult with the Central Bank and obtain its consent. The issuer of stablecoins applying for permission in the first paragraph shall be limited to joint stock companies, and the minimum paid-in capital shall be determined by the competent authority. The qualification conditions, application procedures, documents to be attached, types of stablecoins that may be issued, application scenarios, revocation of permission, and other matters to be complied with for issuers applying for permission in the first paragraph shall be governed by measures formulated by the competent authority, and when necessary, opinions from the Central Bank, relevant industry associations, or relevant agencies shall be consulted to review and amend them.

Article 35 Virtual asset service providers providing services listed in Paragraph 1 of Article 6 involving stablecoins shall, unless otherwise stipulated by the competent authority, ensure that such stablecoins are issued with permission pursuant to Paragraph 1 of Article 34 or have obtained consent from the competent authority for trading before providing services; the rules regarding the procedures, conditions, revocation, and other matters to be complied with for virtual asset service providers applying for consent for trading shall be formulated by the competent authority in consultation with the Central Bank.

Article 36 Stablecoin issuers shall set up and maintain sufficient reserve assets, stored in financial institutions within the territory, and such reserve assets shall be kept separate from their own property. Except for the reserves deposited pursuant to Paragraph 2, they shall be entirely placed in trust with financial institutions for custody and subject to regular audits. When the total face value of stablecoins issued by a stablecoin issuer reaches a certain amount, it shall deposit sufficient reserves, which shall be counted towards the reserve assets mentioned in the preceding paragraph. Issues of stablecoins involving foreign exchange shall be handled in accordance with the regulations of the Central Bank. Stablecoin issuers shall not utilize the reserve assets mentioned in the first paragraph except for reasons meeting the requirements of the competent authority. The measures regarding the setting up, utilization, and regular audit procedures and methods for the reserve assets mentioned in the first and preceding paragraphs, and other matters to be complied with, shall be formulated by the competent authority in consultation with the Central Bank. The measures regarding the certain amount in the second paragraph, the ratio, method, adjustment, audit, and other matters to be complied with for reserve deposits shall be formulated by the Central Bank in consultation with the competent authority.

Article 37 Stablecoin issuers shall issue and redeem stablecoins at par value. Stablecoin issuers shall not pay any form of interest or returns on the stablecoins they issue. Stablecoin issuers shall not refuse holders' requests for redemption and shall complete redemption promptly upon receiving the request. However, this does not apply if prohibited by other laws or otherwise stipulated by the competent authority. The measures regarding the procedures, methods, and other matters to be complied with for the issuance and redemption of stablecoins mentioned in the first paragraph shall be formulated by the competent authority in consultation with the Central Bank.

Article 38 Non-holders of stablecoins shall not make any claims or exercise other rights against the reserve assets mentioned in Paragraph 1 of Article 36. When a stablecoin issuer goes bankrupt, the reserve assets mentioned in Paragraph 1 of Article 36 do not belong to its bankruptcy estate, and stablecoin holders have priority in compensation from such reserve assets.

Article 39 Stablecoin issuers shall establish internal control and audit systems, information security management systems, and business continuity policies for the issuance and redemption of stablecoins; the measures for this shall be formulated by the competent authority in consultation with the Central Bank.

Article 40 Stablecoin issuers shall keep confidential transaction data and other related data regarding the issuance and redemption of stablecoins, unless otherwise provided by other laws or the competent authority.

Article 41 Stablecoin issuers shall disclose the following information externally:

1. Offering circulars.
2. Reserve asset management policies and stablecoin redemption policies.
3. Outstanding balance of stablecoins in circulation.
4. Composition, value, and results of regular audits performed pursuant to Paragraph 1 of Article 36 of the reserve assets.
5. External audit reports of reserve assets.
6. Other information designated by the competent authority. The measures regarding the frequency, procedures, methods, and other matters to be complied with for the disclosure of information mentioned in the preceding paragraph shall be formulated by the competent authority in consultation with the Central Bank. Stablecoin issuers shall report stablecoin issuance-related data to the competent authority and the Central Bank in accordance with their regulations.

Chapter 5 Management and Supervision

Article 42 The issuance or trading of virtual assets shall not involve false, fraudulent, concealing, or other acts sufficient to mislead others regarding information that could significantly affect the issuance or trading of virtual assets. The term "information that could significantly affect the issuance or trading of virtual assets" mentioned in the preceding paragraph refers to information that has a significant impact on the price of virtual asset issuance or trading, or on the subscription or trading decisions of legitimate traders. Violators of the provisions of the first paragraph shall be liable for damages suffered by bona fide traders of such virtual assets as a result. Except for necessary measures taken by virtual asset service providers pursuant to competent authority regulations to maintain equilibrium in trading market prices, no one shall directly or indirectly engage in manipulative acts affecting the supply or demand of virtual assets with the intent to influence the trading price of virtual assets or create a false impression of active trading. Violators of the preceding paragraph shall be liable for damages suffered by bona fide traders of such virtual assets as a result. The right to claim damages under the third and preceding paragraphs shall be extinguished if not exercised within two years from the time the claimant becomes aware of the cause for compensation; if five years have passed since the occurrence of the cause for compensation, it shall also be extinguished.

Article 43 To protect public interests or trader benefits or maintain market order, the competent authority may at any time order virtual asset service providers, industry associations, stablecoin issuers, or related parties with financial or business dealings with them to submit financial, business reports, or other relevant materials within a specified period, and may directly send personnel or entrust appropriate institutions to inspect the business, property, equipment, books, documents, electromagnetic records, systems, wallets, or other relevant objects or materials of virtual asset service providers, industry associations, stablecoin issuers, or their related parties; if there is a major suspicion of violating laws, it may also seal or retrieve relevant documents. When deemed necessary, the competent authority may at any time designate lawyers, certified public accountants, or other specialized professionals or technicians to conduct the inspections mentioned in the preceding paragraph and submit truthful reports or opinions to the competent authority, with expenses borne by the inspected party. The competent authority may request other agencies or order financial institutions to provide necessary information or records regarding parties suspected of violating this Act. The competent authority shall assist judicial police agencies in retrieving high-risk address data of virtual assets from virtual asset service providers and supervise virtual asset service providers to cooperate with judicial police agencies in establishing a joint defense and reporting mechanism; upon receiving notifications from judicial police agencies, virtual asset service providers shall continuously monitor the notified virtual asset addresses. Information obtained under this article shall not be published or provided to others except as necessary for sound regulation and protection of traders. The scope of related parties mentioned in the first paragraph shall be determined by the competent authority.

Article 44 When virtual asset service providers violate laws, articles of association, or pose a threat to sound operation, the competent authority may, in addition to correcting them or ordering them to improve within a specified period, impose the following sanctions depending on the severity of the circumstances:

1. Warning.
2. Revocation of resolutions of statutory meetings.
3. Ordering virtual asset service providers to remove persons in charge or other relevant personnel from their positions or suspend their business execution for up to one year.
4. Suspending all or part of the business of virtual asset service providers for up to six months.
5. Ordering or prohibiting the disposal or transfer of specific assets.
6. Revocation or cancellation of business licenses.
7. Other necessary dispositions.

Article 45 If the persons in charge or employees of virtual asset service providers violate this Act or other relevant laws, the competent authority may, depending on the severity of the circumstances, order the virtual asset service provider to suspend their business execution for up to one year or remove them from their positions.

Article 46 When virtual asset service providers have their business licenses revoked or cancelled by the competent authority pursuant to this Act, or are ordered to suspend business, or voluntarily dissolve or stop all or part of their business, they shall settle affairs related to virtual asset businesses conducted before the revocation, cancellation, order to suspend, voluntary dissolution, or suspension. Virtual asset service providers whose business licenses have been revoked or cancelled shall still be regarded as virtual asset service providers within the scope necessary for settling the affairs mentioned in the preceding paragraph; virtual asset service providers ordered to suspend business or approved for dissolution or suspension shall be regarded as not yet suspended or dissolved within the scope of settling virtual asset affairs conducted before suspension or dissolution. When virtual asset service providers suffer significant deterioration in business or finances, cannot pay their debts, or there is a risk of harming client rights and interests, the competent authority may notify relevant agencies or institutions to prohibit such virtual asset service providers and their persons in charge or staff from transferring property, delivering, establishing other rights, or exercising other rights, or order them to transfer their business to other virtual asset service providers. If virtual asset service providers cannot continue to operate due to the reasons mentioned in the first or preceding paragraphs, the competent authority may require them within a specified period to negotiate with other virtual asset service providers to assume their business, and report to the competent authority for approval. If virtual asset service providers cannot handle the matter pursuant to the preceding paragraph, the competent authority may designate other virtual asset service providers to assume the business.

Chapter 6 Penalties

Article 47 Violators of Paragraph 1 or Paragraph 4 of Article 42 shall be sentenced to fixed-term imprisonment of three to ten years and may also be fined not less than New Taiwan dollars ten million but not more than two hundred million. For committing the crime mentioned in the preceding paragraph, if the offender surrenders themselves after the crime and pays the full amount to reach a mediation or settlement with the victim within six months from the date of surrender, the punishment may be mitigated or exempted; and if this leads to the apprehension of persons who initiated, directed, manipulated, or commanded the criminal organization, or allows for the seizure of all property or property interests delivered by victims to the organization, the punishment may be exempted. For committing the crime mentioned in the first paragraph, if the offender confesses during investigation and all subsequent trials, and pays the full amount to reach a mediation or settlement with the victim within six months from the date of first confession during prosecutor investigation, the punishment may be mitigated; and if this leads to the apprehension of persons who initiated, directed, manipulated, or commanded the criminal organization, or allows for the seizure of all property or property interests delivered by victims to the organization, the punishment may be mitigated or exempted. For committing the crime mentioned in the first paragraph, if the property or property interests obtained from the crime exceed the maximum amount of the fine, the fine may be increased within the scope of the obtained interests. For committing the crime mentioned in the first paragraph, if the proceeds of the crime were obtained by the offender or other natural persons, legal persons, or unincorporated organizations under the circumstances listed in Paragraph 2 of Article 38-1 of the Criminal Code, they shall be confiscated, except for those that should be returned to victims, third parties, or persons entitled to claim damages.

Article 48 Violators of Paragraph 1, Paragraph 3, or Paragraph 1 of Article 34 shall be sentenced to fixed-term imprisonment of up to seven years and may also be fined not more than New Taiwan dollars one hundred million. If the representative, agent, employee, or other personnel of a legal person commit the crime mentioned in the preceding paragraph in the course of performing duties, in addition to punishing the responsible person, the legal person shall also be fined the amount stipulated in the preceding paragraph.

Article 49 Persons in charge who violate Paragraph 4 of Article 18, Paragraph 2 of Article 19, or stablecoin issuers who violate Paragraph 3 of Article 36 shall be sentenced to fixed-term imprisonment of up to five years and may also be fined not more than New Taiwan dollars fifty million. In the cases mentioned in the preceding paragraph, in addition to punishing the person in charge, the virtual asset service provider or stablecoin issuer shall also be fined the amount stipulated in the preceding paragraph.

Article 50 Those who fall under any of the following circumstances shall be sentenced to fixed-term imprisonment of up to three years, criminal detention, or fined or concurrently fined not more than New Taiwan dollars two million four hundred thousand:

1. Making false or concealed statements in application matters pursuant to Paragraph 1, Paragraph 3, Paragraph 4, Paragraph 1 of Article 8, or Paragraph 1 of Article 34.
2. Making false or concealed statements in the content of financial or business reports or other relevant materials requested by the competent authority pursuant to Paragraph 1 of Article 43 from virtual asset service providers, stablecoin issuers, or related parties with financial or business dealings with them.
3. Making false or concealed statements in books, tables, vouchers, financial reports, or other relevant business documents required by law or orders issued by the competent authority based on law.
4. Fabricating, altering, destroying, concealing, or masking working papers, relevant records, or documents with the intent to hinder inspection by the competent authority or investigation by judicial organs.

Article 51 Violators of Paragraph 2 of Article 10 shall be sentenced to fixed-term imprisonment of up to one year, criminal detention, or fined or concurrently fined not more than New Taiwan dollars one million two hundred thousand.

Article 52 Those who fall under any of the following circumstances shall be fined not less than New Taiwan dollars three hundred thousand but not more than six million, and may be ordered to improve within a specified period; if improvement is not completed by the deadline, repeated fines may be imposed:

1. Violating Paragraph 2 of Article 7, Paragraph 4 of Article 11, Paragraph 1 of Article 13, Paragraph 1 of Article 18, Paragraph 3 of Article 19 mutatis mutandis applying Paragraph 3 of Article 26, Paragraph 1 of Article 20, Article 21, Article 24, Article 27, Paragraph 1 of Article 29, Paragraph 2 of Article 29, or Article 35.
2. Violating measures regarding financial and business management stipulated in Paragraph 1, Paragraph 2, or Paragraph 3 of Article 8.
3. Failing to establish internal control systems, internal audit systems, information security management systems, operational information management and confidentiality policies, or business continuity policies pursuant to Article 14, or failing to execute them properly.
4. Failing to establish internal operating systems and procedures pursuant to Article 15, or failing to execute them properly.
5. Violating Paragraph 1 of Article 17, or failing to formulate written confidentiality measures ordered by the competent authority pursuant to Paragraph 2 of the same article, or failing to disclose important matters regarding confidentiality measures in the prescribed manner.
6. Violating measures regarding the preparation, reporting, announcement, placement, or preservation of financial reports stipulated in Paragraph 1 or Paragraph 2 of Article 22.
7. Violating measures regarding the methods, items, scope, and timing of information disclosure and reporting stipulated in the first sentence of Paragraph 1, Paragraph 2, Paragraph 3, or the second sentence of Paragraph 1 of Article 23.
8. Failing to establish review criteria and procedures pursuant to Paragraph 1 of Article 25, or violating Paragraph 2 of the same article.
9. Violating measures regarding the types of reports, reporting, announcement, placement, or preservation stipulated in Paragraphs 1 to 3 or Paragraph 4 of Article 26.
10. Violating Paragraph 1 of Article 28, or failing to establish review criteria and procedures pursuant to Paragraph 2 of the same article.
11. The industry association violating rules regarding matters to be recorded in the articles of association, qualification conditions for persons in charge and business personnel, or finances or business stipulated in Paragraph 1 of Article 30.
12. Stablecoin issuers falling under any of the following circumstances: (1) Violating measures regarding the setting up or regular audit procedures and methods of reserve assets stipulated in Paragraph 1 or Paragraph 4 of Article 36. (2) Violating measures regarding the procedures and methods of stablecoin issuance or redemption stipulated in Paragraphs 1 to 3 or Paragraph 4 of Article 37. (3) Failing to establish internal control systems, internal audit systems, information security management systems, or business continuity policies pursuant to Article 39, or failing to execute them properly. (4) Violating Article 40. (5) Violating measures regarding the frequency, procedures, and methods of information disclosure stipulated in Paragraph 1, Paragraph 3, or Paragraph 2 of Article 41.
13. The industry association or related parties with financial or business dealings with it making false or concealed statements in the content of financial or business reports or other relevant materials requested by the competent authority pursuant to Paragraph 1 of Article 43.
14. Failing to submit books, tables, documents, or other reference or report materials ordered by the competent authority within the specified period, or evading, hindering, or refusing inspections conducted by the competent authority according to law. For behaviors punishable by fines pursuant to the preceding paragraph, if the circumstances are minor, the penalty may be waived, or they may first be ordered to improve within a specified period; if improvement is completed, the penalty may be waived. For stablecoin issuers who fail to deposit sufficient reserves in violation of Paragraph 2 of Article 36, the Central Bank shall add an annual interest rate of five percent on the shortfall based on the lowest financing interest rate announced by the bank; in serious cases, the Central Bank shall impose a fine of not less than New Taiwan dollars three hundred thousand but not more than six million.

Article 53 If a legal person violates obligations under administrative laws and is subject to punishment, the intent or negligence of its persons in charge, business personnel, or other employees shall be deemed the intent or negligence of the legal person.

Article 54 For crimes under this Act, if the imposed fine reaches New Taiwan dollars fifty million and the offender is unable to pay, the period of labor service in lieu of imprisonment shall be up to two years, calculated proportionally based on the total fine amount and the number of days in two years; if the imposed fine reaches New Taiwan dollars one hundred million and the offender is unable to pay, the period of labor service in lieu of imprisonment shall be up to three years, calculated proportionally based on the total fine amount and the number of days in three years.

Chapter 7 Supplementary Provisions

Article 55 Virtual asset service providers that have completed money laundering prevention registration pursuant to Paragraph 1 of Article 6 of the Money Laundering Prevention Act, or financial institutions that have provided virtual asset services pursuant to requirements of the competent authority, before the implementation of this Act, shall apply for permission from the competent authority within twelve months after the implementation of this Act, and obtain permission and be issued a license by the competent authority within twenty-one months after the implementation of this Act; those who fail to apply for permission or obtain permission and a license by the deadline shall not continue to operate virtual asset businesses. The period for obtaining the license mentioned in the preceding paragraph may be extended by three months when necessary, limited to one extension.

Article 56 The effective date of this Act shall be determined by the Executive Yuan.