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Taiwan to Set Up Legal Framework on Security Token Offerings by June

Taiwan’s Financial Supervisory Commission (FSC) is considering setting up formal regulations on security token offerings (STOs), in an effort to help small- and medium-sized startup companies raise fund in this innovative way and meanwhile protect investors from illegal funding.

According to FSC chairman Wellington Koo, the draft on STOs regulation is expected to be completed by this June after they hold a symposium with startup entrepreneurs scheduled for the end of April.

The Taiwan authority is taking a proactive approach when it comes to the trending STOs. FSC has drafted a tentative framework with referencing the standards of other countries. It proposed that enterprises whose STO funding are above certain amounts shall initially be sandbox projects, and regulatory measures for them would be formulated and adjusted during the sandbox process; exemptions may apply for fundraising cases with certain small amount, that means, these STOs don’t have to go through procedures of ‘public offering’, but shall be subject to management rules of crowdfunding.


Source: Taiwan Economic Daily

As per the current equity crowdfunding rules, the fundraising amounts shall not exceed NT$30 million per year, and an individual investor shall invest no more than NT$50,000 in a project, and the total investment amount in a year shall not exceed NT$100,000.

FSC officer stressed that the benchmark amount of STOs under regulation would reference the aforementioned equity crowdfunding rules, the specific amount is still under discussion in the commission.

Jason Hsu, who has always wanted to turn Taiwan into a blockchain island, for which he was given the nickname “Crypto Congressman” by Vitalik Buterin, said that startup entrepreneurs in Taiwan are looking forward to the fundraising mechanism based on securities token offerings.

He added that young Taiwanese have lost interest in stocks, while STO, rising as the next-gen capital market product, will help make Taiwanese startups more visible in the international market within the next 5-10 years. Hsu also suggested that there could be different exchanges for STOs not only limited to existing stock exchanges.

As per a previous report by 8btc, Taiwan’s financial regulator had already revealed plans to outline regulations for initial coin offerings (ICO) by June 2019, reversing a hands-off policy adopted in 2017, according to the FSC chairman. While mainland China holds a rigid attitude towards ICO activities and cryptocurrency trading, Taiwan has been seizing the chance to become a blockchain and crypto island with sound crypto regulatory environment.

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