Taiwanese Crypto Investment Approved for Qualified Investors

Key Points:

• Taiwan's FSC now allows professional investors to invest in foreign crypto ETFs through a re-entrustment process.
• Securities firms must establish suitability assessments and obtain board approval before joining Taiwanese crypto investment products.

The new guidelines from Taiwan's Financial Supervisory Commission allow professional investors to invest in foreign virtual asset exchange-traded funds through re-entrustment.

Taiwanese Crypto Investment Greenlit for Professional Investors

The move is part of the FSC's effort to diversify the suite of investment products and further develop the country's securities industry.

Re-entrustment is the process whereby investors entrust sub-brokerages or fund houses with virtual asset investment management skills. The FSC wants to boost that business but has kept strict limits on participation in such a high-risk business for Taiwanese crypto investment. Participation in such funds is limited to professional investors, including institutional investors, accredited investors, and professional clients.

The FSC requires securities firms to establish and implement, at the board of directors level, a suitability assessment system to protect investors by reviewing their knowledge and experience before they can invest in such ETFs. Training of the staff of firms should also be regularly conducted with respect to the latest developments in the intricacies of virtual assets.

Stringent AML Compliance Imposed on Virtual Asset Service Providers

Besides AML, VASPs should be transparent to consumers and protect them. Their failure to do so brought severe penalties. Before joining Taiwanese crypto investment, non-institutional investors need to sign a risk warning letter. The securities firms have to provide very detailed information and regular education about these high-risk products.