Taiwan's virtual asset supervision is tightening, and one of the first firms to obtain anti-money laundering (AML) registration has exited the market. HzBit (Hongzhu Digital Co., Ltd.), listed as a VASP (Virtual Asset Service Provider) on the Financial Supervisory Commission's (FSC) registry since September 22 last year, has announced its immediate closure.
Regulatory Shift Wipes Out Category B Members
HzBit cited recent government policy changes and internal strategic adjustments as the reasons, stating that after "careful evaluation" by management, operations would cease today. All transaction and service processing will end at 5 PM today. The firm was authorized to operate as a "virtual asset exchange" with paid-in capital of NT$15 million. Industry sources note that Category B members of the VASP association—which include OTC store operators and Bitcoin ATM providers—have struggled severely since the FSC banned cash transactions. HzBit was the last remaining Category B member; its closure marks the complete phase-out of this group.
VASP Registry Shrinks, Oligopoly on the Horizon?
With HzBit's exit, the FSC's VASP AML-registered list has shrunk from nine to eight. The remaining entities are Heya Digital, Pioneering Digital, Weight Technology, Modern Wealth, Fusheng Digital, Cross-Chain Technology, Bito Technology, and Link Technology. While the shrinking list does not necessarily signal a weakening crypto industry, existing regulations—enforced before the Virtual Asset Service Act has passed its third reading—have made it difficult for many Taiwanese crypto firms to turn a profit. Whether the market will veer toward an oligopoly remains to be seen.