Taiwan Crypto Restrictions: What’s Banned, What’s Allowed, and How It Affects You

When it comes to Taiwan crypto restrictions, the regulatory framework that governs how cryptocurrency is used, traded, and taxed in Taiwan. Also known as Taiwan cryptocurrency regulation, it’s one of the clearest, most enforced systems in Asia—strict on businesses, but loose on individuals. Unlike China, where crypto is outright banned, or El Salvador, where Bitcoin is legal tender, Taiwan walks a tightrope: you can hold crypto in your wallet, but running an exchange without a license is a criminal offense.

The Financial Supervisory Commission (FSC), Taiwan’s main financial regulator that oversees all crypto exchanges and service providers. Also known as Taiwan FSC, it requires every crypto exchange operating in Taiwan to register as a Virtual Asset Service Provider (VASP). That means platforms like Binance or Bybit can’t just show up and start taking deposits—they need local licenses, KYC checks, and AML systems in place. Unlicensed exchanges? They’re blocked. Users who try to access them? Their bank accounts can get frozen. The FSC doesn’t mess around. In 2023, they shut down three major offshore platforms that were still accepting Taiwanese users, and they’ve been public about it.

But here’s the twist: if you’re just holding Bitcoin or Ethereum in a private wallet, buying through a peer-to-peer app, or trading on a foreign site you access from home? That’s not illegal. The law targets businesses, not individuals. So while you can’t open an account with an unlicensed exchange, you can still buy crypto using a friend’s account, a local ATM, or a decentralized wallet. That’s why peer-to-peer trading on platforms like LocalBitcoins or Paxful is still common in Taipei and Taichung. The government doesn’t track your wallet, but it does track your bank transfers—if they see large, repeated payments to foreign crypto platforms, they’ll ask questions.

And then there’s the blockchain, the underlying technology that powers crypto, which Taiwan actively encourages for enterprise use. Also known as distributed ledger technology, it is treated completely differently. Companies using blockchain for supply chain tracking, digital identity, or smart contracts get tax breaks and government support. The Taipei government even launched a blockchain innovation lab in 2022 to help startups build compliant solutions. So if you’re building a blockchain tool for logistics or healthcare, you’re welcome. If you’re running a crypto exchange that lets people trade without KYC? You’re on the wrong side of the law.

What does this mean for you? If you’re in Taiwan and want to trade crypto legally, you have to use one of the few licensed exchanges—like Korbit Taiwan, BitoPro, or TwinOaks. These platforms are safe, regulated, and fully compliant. But they’re also slow, with limited coin choices and strict withdrawal limits. If you want more coins or faster access, you’re risking your bank account. And if you’re thinking about launching a crypto project in Taiwan? You’ll need lawyers, auditors, and a solid plan to pass FSC scrutiny. It’s not impossible, but it’s not easy either.

What follows are real stories from people who’ve been caught in the middle of these rules—exchanges that vanished, airdrops that got blocked, and users who lost access to their funds overnight. You’ll find reviews of platforms that tried to operate in Taiwan and failed, breakdowns of how local banks react to crypto payments, and guides on how to stay compliant without getting shut down. This isn’t theory. These are the consequences of Taiwan’s crypto restrictions in action.