As the global cryptocurrency market continues to evolve, more investors in Taiwan are asking: Is investing in and trading cryptocurrency legal? And what legal risks might they face? This guide dives into Taiwan’s current regulatory landscape for digital assets, tax obligations, common scams, and compliance updates—helping you make informed decisions while staying within legal boundaries.
Cryptocurrency Legality in Taiwan: What You Need to Know
Yes, cryptocurrency investment and trading are legal in Taiwan, provided they comply with existing financial regulations. While individuals can freely buy, sell, and hold digital assets, the regulatory focus lies heavily on anti-money laundering (AML), fraud prevention, and unauthorized fundraising activities.
A key development is the Anti-Money Laundering Act, which now requires all virtual asset service providers (VASPs) operating in Taiwan to complete AML registration. Any entity offering cryptocurrency services without proper registration faces severe penalties—up to two years in prison and fines of up to NT$5 million.
👉 Discover how compliant crypto platforms operate under new regulations.
This means that while owning crypto is not illegal, using unregistered or suspicious exchanges significantly increases your risk of involvement in money laundering or fraud cases. Always verify whether a platform is officially registered with Taiwan’s Financial Supervisory Commission (FSC).
Do You Need to Pay Taxes on Crypto Gains?
The Ministry of Finance has clarified how cryptocurrency profits are taxed, depending on the nature of the transaction:
For Securities-like Digital Assets
If a virtual currency is classified as having “securities characteristics,” its trading gains or losses fall under "securities transaction income" as defined by the Income Tax Act. Currently, Taiwan has suspended the securities transaction tax (STT), so individual investors don’t pay taxes on these gains. However, profit-making businesses must include these gains in their minimum taxable income under the Basic Taxation Act.
For Non-Securities Cryptocurrencies
Most major cryptocurrencies like Bitcoin and Ethereum are considered non-securities digital assets. Profits from occasional trades are treated as "property transaction income." The taxable amount is calculated as:
Sale price – acquisition cost – related fees = taxable income
This income must be included in your annual comprehensive income tax return.
⚠️ Beware: Fake Tax Demands from Exchanges
A growing scam tactic involves fake exchanges claiming you must pay taxes directly to the platform before withdrawing funds. This is not legitimate.
Real tax obligations are assessed and collected by the National Taxation Bureau, not private platforms. No authorized agency has delegated tax collection to crypto exchanges.
👉 Learn how secure platforms handle withdrawals without hidden fees.
If an exchange demands payment to release your assets, it’s likely a scam. Always consult a tax professional if uncertain.
FAQ: Common Questions About Crypto in Taiwan
Q: Can I get in trouble just for owning cryptocurrency?
A: No. Simply holding digital assets is legal and does not violate any laws in Taiwan.
Q: Are there legal crypto exchanges in Taiwan?
A: Yes. You can find a list of registered VASPs on the Securities and Futures Bureau’s official website under “Virtual Asset Service Providers.” Only use platforms listed there for maximum safety.
Q: What happens if my bank account gets flagged?
A: If your account is used for transactions linked to illegal platforms or money laundering, banks may label it a "warning account" (警示帳戶). This restricts all financial activities and could lead to criminal investigations.
Q: Can I lose money even on a legitimate-looking exchange?
A: Yes. Even if an exchange appears trustworthy, poor security or mismanagement can result in loss. Always enable two-factor authentication and avoid keeping large amounts on any exchange.
Q: Will I go to jail for using an unregistered exchange?
A: While individual users aren’t typically prosecuted, involvement in transactions tied to money laundering or fraud can lead to criminal liability—especially if your account facilitates illegal flows.
Risks of Using Unlicensed Crypto Platforms
Using an unregulated or offshore exchange may seem convenient, but it carries serious consequences:
- Your bank may flag your account due to suspicious inflows or outflows
- You could unknowingly assist money laundering operations
- Funds may be lost permanently due to platform collapse or exit scams
- Legal exposure increases if authorities trace illicit funds through your transactions
Many scams start with fraudsters posing as investment advisors who request access to your bank account for “loan processing” or “portfolio management.” Once compromised, your identity and finances become vulnerable.
How to Avoid Crypto Scams: 5 Red Flags to Watch For
Cryptocurrency scams are evolving rapidly. Here are five warning signs every investor should recognize:
1. Pressure to Deposit Immediately
Scammers create urgency with phrases like “limited-time offer” or “exclusive access.” Legitimate platforms never pressure users via LINE or private messages to invest quickly.
2. Personal "Account Managers"
Fake customer support agents often contact victims through LINE, Facebook Messenger, or Instagram. Real exchanges communicate through official channels like email or in-app notifications—not personal chat accounts.
3. Withdrawal Restrictions
Scam platforms impose arbitrary rules such as:
- Minimum investment thresholds before withdrawal
- VIP status requirements
- Demanding “tax payments” before releasing funds
These are traps designed to extract more money from victims.
4. Hidden or Unusual Fees
Watch out for unexpected charges labeled as “processing fees,” “account maintenance,” or “compliance costs.” Legitimate platforms have transparent fee structures.
5. Fake Website Links
Phishing attacks often begin with a fraudulent link that mimics a real exchange. Even well-known brands are impersonated. Always type the official URL manually or bookmark trusted sites.
👉 Stay protected by using platforms with verified security protocols.
New Regulatory Update: Crypto Business Registration Mandate (2025)
Starting December 1, 2025, all cryptocurrency service providers—including exchanges and individual dealers (幣商)—must comply with the Mandatory Registration Regime announced by the FSC.
Key requirements:
- All operators must register under the VASP framework
- Existing compliant firms must re-apply to meet updated standards
- Failure to register results in criminal liability: up to 2 years imprisonment + NT$5 million fine
This regulation aims to enhance market transparency, strengthen investor protection, and align Taiwan with international AML standards set by the FATF.
While compliance may increase operational costs for businesses, it ultimately builds trust and legitimacy in the digital asset ecosystem.
Final Advice: Protect Yourself with Knowledge and Caution
The rise of cryptocurrency brings both opportunities and risks. To stay safe:
✅ Use only FSC-registered exchanges
✅ Never share banking credentials or verification codes
✅ Verify URLs before logging in
✅ Report suspicious activity to authorities
✅ Consult legal or financial experts when in doubt
Whether you're dealing with a frozen bank account, suspect fraud, or need clarity on compliance obligations, seeking professional guidance early can prevent long-term damage.
By understanding Taiwan’s evolving crypto regulations and staying alert to scams, you can participate in the digital economy confidently—and legally.