The Blockchain and Cryptocurrency Self-Regulatory Organization (SRO) in Taiwan represents a significant step forward in fostering responsible innovation within the digital asset industry. Established through collaboration among 15 major cryptocurrency exchanges and supported by key stakeholders including the Taiwan FinTech Association, legislators, and former government officials, this initiative introduces a comprehensive Exchange Code of Conduct designed to protect users, ensure market integrity, and promote sustainable growth.
By adopting these self-regulatory principles, exchange members commit to upholding high standards in compliance, transparency, risk management, and ethical operations—laying the foundation for a more trustworthy and resilient crypto ecosystem.
Core Principles of the Crypto SRO
1. Compliance with Legal Frameworks
All member exchanges pledge to operate within applicable laws and regulations, recognizing that digital asset platforms may fall under financial regulatory oversight depending on their services.
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Key commitments include:
- Obtaining necessary governmental approvals before offering regulated financial services.
- Refraining from facilitating transactions or advisory services involving illegal financial instruments.
- Adhering to broader legal obligations such as consumer protection and personal data privacy laws (e.g., Taiwan’s Personal Data Protection Act).
- Using the SRO guidelines as an additional layer of governance beyond minimum legal requirements.
This proactive approach not only reduces legal exposure but also strengthens public confidence in the legitimacy of digital asset trading.
2. Transparency and User Disclosure
Transparency is essential for informed decision-making. Exchanges agree to provide clear, accurate, and timely information to users and relevant authorities.
Mandatory disclosures include:
- Full legal name, registered address, and contact details of the platform.
- Background and professional qualifications of key executives (CEO, directors, etc.).
- Status of regulatory approvals or licenses held.
Additionally, platforms must clearly communicate:
- Fee structures and associated costs.
- Risks involved in trading digital assets.
- Objective criteria used for listing tokens or managing trades.
Voluntary disclosure of supplementary information—such as reserve audits or security protocols—is encouraged to further empower investor choice.
3. Responsible Platform Management
Exchanges act as custodians of user trust. As such, they commit to acting as prudent managers by prioritizing system integrity, data protection, and service excellence.
Operational commitments include:
- Implementing transparent governance practices to prevent market manipulation.
- Designing robust, scalable, and secure technical infrastructure.
- Ensuring that all digital assets held on behalf of users remain their property.
- Prohibiting unauthorized use of user voting rights (where applicable).
- Avoiding unjustified restrictions on account access, especially when fees are current.
These measures reinforce accountability and ensure that platforms serve user interests first.
4. Operational Risk Management
Given the cyber-physical nature of digital assets, exchanges must proactively identify and mitigate operational threats.
Key safeguards include:
- Asset segregation and cold storage solutions to protect user funds—maintaining a high proportion of crypto reserves offline.
- Real-time monitoring systems to detect and prevent money laundering (AML) and terrorist financing (CFT).
- Mandatory Know Your Customer (KYC) procedures for fiat-related transactions.
- Multi-factor authentication (MFA) for withdrawals and high-value transactions.
- Business continuity planning to ensure rapid recovery from major disruptions like cyberattacks or natural disasters.
Such protocols are critical in minimizing fraud risk and maintaining platform resilience.
5. Market, Liquidity, and Credit Risk Oversight
Effective risk assessment ensures long-term platform stability, particularly when offering advanced services like leveraged trading.
Measures include:
- Maintaining adequate liquid reserves to withstand unexpected losses.
- For margin trading: requiring high-quality collateral, applying conservative valuation haircuts, and enforcing position limits.
- Preventing unethical competition among members—such as spreading misinformation or damaging peer reputations.
- Taking immediate action against deceptive, fraudulent, or trust-eroding behaviors.
These controls help maintain orderly markets and protect both users and the broader ecosystem.
Industry Response: MaiCoin’s Proactive Steps
One notable early adopter is MaiCoin, which recently announced concrete actions to strengthen its anti-money laundering (AML) framework. In alignment with the new SRO standards, MaiCoin discontinued its Bitcoin sales service at Hi-Life convenience stores—a move aimed at enhancing transaction traceability and reducing compliance risks.
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This strategic shift reflects a broader industry trend: moving away from anonymous retail access points toward more regulated, identity-verified channels. MaiCoin has also engaged in ongoing dialogue with regulators to refine its risk control mechanisms without compromising user experience.
Why Self-Regulation Matters in 2025
As blockchain technology evolves faster than legislation can keep pace, self-regulation fills a crucial governance gap. The Taiwan SRO model demonstrates how industry players can collaborate with policymakers to create a balanced environment—one that supports innovation while protecting consumers.
Unlike top-down regulation, which can be rigid or slow-moving, self-regulation allows for agile adaptation to emerging risks and technological shifts. It also signals maturity within the sector, showing regulators that the industry is capable of policing itself responsibly.
Frequently Asked Questions (FAQ)
Q: What is a Crypto Self-Regulatory Organization (SRO)?
A: An SRO is a non-governmental body formed by industry participants to establish and enforce operational standards. In crypto, it helps ensure exchanges operate ethically, securely, and transparently—even in the absence of comprehensive national laws.
Q: Who oversees the Taiwan Blockchain and Cryptocurrency SRO?
A: The initiative was launched by the Taiwan FinTech Association with support from lawmakers and regulators. While independent, it works closely with government agencies to align with public policy goals.
Q: Does joining the SRO mean an exchange is officially licensed?
A: Not necessarily. Membership reflects a commitment to best practices but does not replace formal regulatory licensing. However, adherence may strengthen an exchange’s position during future regulatory reviews.
Q: How does the SRO protect investors?
A: Through mandatory transparency, asset protection rules, fraud prevention systems, and fair trading policies—all designed to reduce risks and increase accountability.
Q: Can users verify if an exchange follows these guidelines?
A: Yes. Member exchanges are required to publish compliance reports and key operational details. Users should review these disclosures before engaging with any platform.
Q: Are there penalties for violating the Code of Conduct?
A: While enforcement mechanisms are still evolving, non-compliant members may face suspension or expulsion from the SRO—damaging their reputation and credibility.
The Path Forward
The establishment of Taiwan’s crypto SRO marks a pivotal moment in regional digital finance. By embracing self-governance, exchanges demonstrate responsibility and readiness for mainstream integration.
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As other markets observe this model, similar initiatives may emerge across Asia and beyond—potentially shaping a new era of cooperative regulation where innovation thrives within trusted boundaries.
With continued collaboration between industry leaders, regulators, and technologists, the future of digital assets looks not only promising but also secure.