Taiwan’s Financial Supervisory Commission has revised its anti-fraud compliance rules for financial institutions and virtual asset service providers, changing 52 provisions and adding 3 new articles. The update brings banks, electronic payment institutions, and VASPs into a tighter joint response system and targets a long-standing blind spot between fiat transaction records and on-chain asset flows.
Data request mechanism now covers both banking records and crypto activity
Under the new framework, financial institutions and VASPs will be allowed to request and exchange information on specific accounts, transaction records, and unusual activity where legally permitted. Both sides must provide necessary data to help determine whether a case involves fraud, money laundering, or illicit fund transfers. Until now, banks generally saw only fiat movement, while exchanges could monitor only crypto flows. That separation left room for fraud rings to move victim funds into virtual assets and then shift them across overseas addresses before investigators could react.
The rule change is designed to close that gap and formally place VASPs inside Taiwan’s wider anti-fraud coordination system. The regulatory message is plain: monitoring only the banking side no longer captures the full path of suspicious funds once they are converted into stablecoins and sent on-chain.
Anti-fraud platform structure widens as virtual assets move into the regulatory core
Institutions that build relevant platforms will need to apply to the FSC and clearly define what customer information participating entities may collect, process, and use. According to the source material, current platform construction mainly involves the Financial Information Service Co. and the Joint Credit Information Center. Banks, e-payment firms, and VASPs could all become nodes in the coordinated network.
The amended rules also require deposit-taking institutions, electronic payment institutions, and VASPs to establish joint reporting procedures. The purpose is to stop fraud proceeds from moving quickly between fiat and crypto channels. The report notes that in many recent cases, funds no longer remain in bank accounts for long; they are rapidly converted into stablecoins such as USDT and then sent to overseas blockchain addresses. That shift in supervision shows virtual assets being treated less as a stand-alone tech business and more as part of financial infrastructure.
Leftover crypto in flagged accounts may be sold and returned in fiat
Another major change is the addition of a restitution mechanism for remaining virtual assets. In many fraud cases, victim funds had already been converted into crypto, but some victims did not have exchange accounts and were not in a position to receive digital assets directly. That often stalled the return process. Price volatility created another problem, as it made the amount to be returned harder to settle in practice.
To address this, the FSC now allows VASPs to liquidate remaining assets held in flagged virtual asset accounts and return the proceeds to victims in fiat, where permitted by law. The regulator expects this to reduce disputes linked to crypto price swings and speed up restitution. It also changes the role of exchanges. Beyond trading services, they are now expected to take on more responsibility in judicial cooperation, asset preservation, and risk control.
Cooperation has started, but privacy, technology, and liability questions remain
The new coordination model does not remove the practical difficulties between banks and VASPs. The source says that as early as 2025, regulators had already planned to fold VASPs into the anti-fraud inquiry system to connect fiat flow data with exchange-side crypto activity. At that stage, some platform operators said they were willing to assist anti-fraud efforts but lacked clear legal authorization and real-time tools, leaving them able to spot anomalies without being able to act quickly.
Banks face pressure as well. Another challenge is uneven capacity across the VASP sector, with different firms operating under very different technical standards, internal controls, and resource levels. Even so, the direction of regulation is now clear: crypto platforms in Taiwan are being pushed to operate as important nodes in the country’s anti-fraud and anti-money-laundering system, much closer to the role of traditional financial institutions.