Four Operators Exit the Market, High Compliance Costs as Main Reason
Taiwan’s virtual asset industry is undergoing a significant market reshuffle. According to the Financial Supervisory Commission (FSC) updated “Virtual Asset Service Provider (VASP) Anti-Money Laundering List” on August 8, 2025, the number of exchanges that have completed compliance declarations and are operating in accordance with regulations has sharply decreased to 8.
Compared to the previous list, 4 operators have chosen to exit the Taiwanese market this time, namely:
– “BStyle” Coin Generation Technology
– “BitstreetX” San Chuan Token
– “BitYacht” Pi Ya Te Technology
– “WOO Network” Cui Ke Technology
What is the VASP List?
The “VASP List” is a “white list” published by the FSC, listing virtual asset service providers that meet the basic regulations of the Anti-Money Laundering Act in Taiwan. The list includes exchanges such as MaiCoin, Bitgo, HOYABIT, and XREX. The official name of this list is “List of Virtual Currency Platforms that have Completed Compliance Declarations for Anti-Money Laundering.” Its core purpose is to identify which operators have submitted written statements to the government authority FSC, committing to comply with Taiwan’s anti-money laundering regulations.
What is the significance of this list?
– Minimum threshold for legal operation:
Not being on the list signifies illegal operation. This is the basis for whether operators can legally provide services in Taiwan. Not being on the list means non-compliance with anti-money laundering regulations, leading to illegal operations with potential hefty fines or even criminal liabilities.
– Key to cooperating with banks:
Taiwan’s banking institutions place great importance on regulatory compliance. Banks will only cooperate with VASP operators on the list, providing trust accounts or cooperative channels for “New Taiwan Dollar inflows and outflows.” If an exchange cannot connect with banking services, users cannot transact in New Taiwan Dollars.
– Basic protection for consumers:
This list provides consumers with a quick way to filter platforms. Choosing operators on the list at least ensures that the platform has basic “Know Your Customer (KYC)” and transaction monitoring mechanisms, reducing the risk of the platform being used for fraud or money laundering.
In a cryptocurrency market filled with various information, the FSC’s list is the most direct and authoritative reference for the general public to distinguish between “legitimate operators” and “fraudulent/illegal platforms.”
⚠️ Note: This list only indicates that operators comply with “anti-money laundering” regulations and does not equal FSC endorsement of the platform’s asset safety or investment risks. Investors still need to assess the risks of virtual assets, the security of the platform, and service quality on their own.
It is worth noting that Taiwan’s regulatory system is being upgraded:
In the past (declaration system): Operators only needed to submit a compliance “declaration,” which was relatively lenient.
Now (registration system): Starting from the end of 2024, it will fully transition to a stricter “registration system.” All operators (including those on the original list) must submit a permit application within six months, resubmit documents including internal control systems and accounting reports, and must obtain a license through FSC review for “registration” to operate legally within 15 months.
Thus, the current list can be seen as a reference list of legitimate operators during the transitional period from the declaration system to the registration system. (Currently, no operator has completed anti-money laundering registration according to the VASP registration regulations.)
Why has the number changed from 26 to 8?
The market reshuffle is driven by significant changes in Taiwan’s regulatory framework for virtual assets. On July 5, 2024, there were a total of 26 operators that had completed compliance declarations. However, on July 31, 2024, the Legislative Yuan amended the Anti-Money Laundering Act, clearly requiring VASP operators to register for anti-money laundering with the FSC. Subsequently, on November 26 of the same year, the FSC officially announced the “Anti-Money Laundering Registration Regulations for Businesses or Individuals Providing Virtual Asset Services,” declaring that Taiwan’s virtual asset industry would transition from the previous “compliance declaration system” to a strictly enforced “registration system.”
This is a process of “eliminating the weak and retaining the strong,” and the core reasons for the sharp decrease in the number of operators can be summarized in the following three points:
Reason 1: Surge in operating costs
This is the most direct reason. In the past, operators only needed to submit a “compliance declaration,” and the declaration did not specify concrete qualification conditions such as capital and cybersecurity, resulting in relatively low operating costs. However, starting from the end of 2024, the new “registration system” requires operators to:
– Hire accountants: to provide an “Internal Control System Review Report,” which incurs a professional fee ranging from hundreds of thousands to millions.
– Increase legal/compliance personnel: qualified professionals are needed to maintain and execute the anti-money laundering system.
– Invest in system construction: to upgrade or introduce trading monitoring and KYC systems that comply with regulations.
These new fixed costs are an unbearable burden for many smaller operators or those with poor profitability.
Reason 2: Stricter regulatory requirements
The new regulations not only require spending money but also demand operators to establish a complete and effective “internal control and audit system.” This means companies need to have the capability to design, implement, and maintain a risk control process that meets financial regulatory intensity. Simultaneously, if operators continue to engage in virtual currency-related business without passing the registration system, they will face criminal liability, which is more intimidating than the previous administrative penalties (fines). For many teams that started with technology or community backgrounds and lack knowledge of financial regulations, this is an extremely high professional threshold.
Reason 3: Limitations on business models
In the past, some operators relied on over-the-counter (OTC) or cash trading as their main business. However, the new strict regulations prohibit anonymous trading; all customers must complete stringent identity verification and require enhanced fund flow tracking, making the scrutiny of funding sources much more rigorous. These measures have significantly increased the difficulty and cost of OTC business, making it nearly impossible to operate as before, directly impacting the core revenue sources of certain operators, prompting them to decide to cease operations.
Since the formal implementation of the registration system, Taiwan’s virtual asset market has officially bid farewell to the era of barbaric growth. The FSC has conducted a thorough market cleanup by raising regulatory thresholds. Operators who cannot bear high costs, lack compliance expertise, or whose original business models are no longer compliant have been eliminated in this wave.
Short-term bearish, long-term bullish, Taiwan’s crypto industry moving towards healthy development
The tightening of VASP regulation has resulted in fewer local exchanges for Taiwanese users to choose from. As the market trends toward oligopoly competition, the competitive pressure on operators regarding transaction fees, service quality, or product innovation may weaken. In the long term, promotional activities or service diversity may not be as good as before.
For users of “eliminated operators,” this poses a significant problem. They must withdraw their virtual assets from the platform before operators cease services and find and register a compliant exchange, which involves certain time pressure and operational costs.
However, in the long run, this seems to be a necessary process. By establishing a clear and strict regulatory framework, non-compliant operators will be eliminated, and the remaining compliant operators will significantly enhance the overall market’s security, reducing fraudulent platforms. As the entire industry’s development becomes more stable, it will help attract more cooperation from traditional financial institutions, investments from large enterprises, and the trust of mainstream investors, positively impacting the long-term healthy development of the industry.
In the past, the cryptocurrency industry experienced a chaotic “barbaric growth” period filled with opportunities driven by the spirit of decentralization. This force has spawned countless new technologies and business models, but it has also been accompanied by enormous risks such as fraud, money laundering, and asset security.
Now, the FSC has decisively established a strict “registration system” not to stifle innovation but to attempt to lay a stable runway for this rapidly developing field, establishing the necessary “safety barriers” and “game rules.” This period of growing pains has eliminated participants who cannot shoulder social responsibilities and compliance costs. While it may seem to stifle market diversity, in the long run, it is to protect users, build trust, and enable the entire industry to go further.
However, the real challenge lies ahead:
Will the regulatory framework maintain sufficient flexibility to adapt to the ever-emerging new types of assets and services? And can the remaining operators continue to drive product innovation that addresses real-world problems based on rigorous compliance?
This reshuffle is not the end of innovation but lays the necessary foundation for the next stage of more mature, trustworthy, and sustainable financial innovations.