FSC Strengthens Cross-Sector Anti-Fraud Measures Between Finance and Virtual Assets

The Financial Supervisory Commission (FSC) announced today that it is amending sub-laws under the Anti-Fraud Act to expand inquiry mechanisms—previously limited to the financial sector—to include Virtual Asset Service Providers (VASPs). This will allow firms to better assess whether accounts are involved in fraud. Additionally, the regulations will formalize procedures for liquidating and returning remaining virtual assets in flagged accounts to protect victims' rights. The sub-laws are expected to be promulgated by July 21st. The Executive Yuan passed amendments to the Anti-Fraud Act late last year to establish mechanisms for victim protection and cross-sector inquiries between financial institutions and VASPs. Chang Chia-kuei, Deputy Director-General of the Banking Bureau, stated that the amendments to the 'Compliance Regulations for Financial Institutions and VASPs Regarding Anti-Fraud' aim to strengthen inter-institutional cooperation. The draft will be open for public comment for 30 days. Chang highlighted four key points: establishing cross-sector inquiry mechanisms, improving anti-fraud platforms, deepening inter-industry cooperation to prevent funds from flowing between fiat and virtual assets, and perfecting the liquidation and return process for virtual assets. The latter ensures that victims without virtual asset accounts can still receive compensation after assets are liquidated, accounting for market fluctuations.