thecoinrepublic.com
- Taiwan introduced its new anti-money laundering (AML) regulations for crypto assets On July 1
- Cryptocurrency advocates consider local laws as particularly harsh
- Taiwan is much more permissive, say, experts, MaiCoin working without a hitch
The recent crackdown by the Communist Government of China against cryptocurrencies, including mining, has led to an exodus of miners, which is being dubbed as the great mining migration. So Taiwan can become a logical choice for miners since it is the nearest nation to mainland China. However, the big question is –Can Cryptocurrency thrive in Taiwan?
The cryptocurrency world is in a state of turmoil. With the Chinese state blitzkrieg hell-bent on steamrolling all cryptocurrency activities, one might wonder if Taiwan can become the next hub for cryptocurrency trade.
When the question was put to a prominent Taiwanese crypto lawyer Will Tseng, he recommended Singapore as a possible destination since regulations are much clearer.
New anti-money laundering (AML) regulations for crypto assets
Taiwan introduced its new anti-money laundering (AML) regulations for crypto assets On July 1. Eight crypto exchanges were chosen by Taiwan’s financial watchdog, the FSC, for implementing the first stage of the new regulations. The effect of the new regulation was broad since three of the eight cryptocurrency exchanges ceased operations. The latest anti-money laundering (AML) requirements include reporting transactions exceeding 500,000 New Taiwan dollars (around US$18,000) to the bureau of investigation (FIU).
The cryptocurrency industry as a whole considers Taiwanese local laws as particularly harsh. Prominent Taiwanese lawmaker Jason Hsu had campaigned to include virtual currency service providers financial institutions into the list of financial institutions required to comply with Taiwan’s Money Laundering Control Act.
Several Decentralized finance and blockchain firms have made Taiwan it’s home. Crypto Token companies have also set up engineering, sales, and marketing teams in Taiwan and are also employing local engineers, Hsu said.
Moving to Taiwan
Among the many tech entrepreneurs pulled by the urge to return to their roots in 2019, Leo Cheng reluctantly left Silicon Valley to join his business partners in Taiwan. Wary of losing networking opportunities and his colleagues in San Francisco, Cheng was very nervous. But then COVID-19 happened, and everything changed.
Cheng launched a decentralized lending protocol, “Cream Finance,” in Taiwan’s capital Taipei. Later Merrill Lynch alum and Taiwan native Kevin Tseng chipped in and launched NAOS, a DeFi marketplace for loans backed by real-world assets.
Since its launch in December , the NAOS has tasted success and has secured 2,500 corporate clients and $250 million in assets originating from the U.S., Mexico, India, and Indonesia.
According to Hsu, when the Covid-19 pandemic was at its peak, 2,000 special gold card employment visas were given to overseas tech entrepreneurs and developers to move to Taiwan. However, it is not clear how many of these are crypto developers or businesses.
In other words, there could be 500 to 1,000 blockchain and crypto-related people here in Taiwan, and a lot of them could be from Silicon Valley. However, it could be surprising to see an exodus of DeFi teams to Taiwan, considering the absence of regulatory clarity for crypto-related businesses. In addition, Crypto hubs are developing in regions like Singapore, and the Taiwanese are not as bullish on cryptocurrencies.
After the Chinese authorities had banned initial coin offerings (ICOs) and asked cryptocurrency exchanges in mainland China to cease operations in 2017, it was said that Taiwan could become the next crypto hub. However, not much could happen to date.
Hsu said that Taiwan had attracted a lot of blockchain and crypto talent. However, it has not been able to retain those talents, and there has been a brain drain or a flight of talent to more amenable locations like Singapore.
High expectations
Mainland China cracked down crypto trading between local banking institutions and crypto entities in 2017; Taiwan witnessed a surge in money inflows, said Alex Liu, chief executive officer of Taiwan’s largest cryptocurrency exchange MaiCoin. MaiCoin, which is akin to Coinbase, and has been allowed hassle-free operations since 2014. It indicates that Taiwan is much more permissive.