Taiwan Opens Door for Professional Investors in Crypto ETFs

Taiwan's Financial Supervisory Commission (FSC) has officially approved a new policy allowing professional investors to invest in foreign cryptocurrency exchange-traded funds (ETFs), including Bitcoin ETFs. 

This decision, announced on September 30, 2024, aims to diversify investment options while managing the inherent risks associated with virtual assets.

Under the new regulations, only professional investors—such as institutional entities, high-net-worth individuals, and experienced individual investors—will have access to these high-risk financial products. The FSC emphasized the complex nature and significant price volatility of cryptocurrencies as key reasons for this restriction.

Securities firms in Taiwan are now required to conduct suitability assessments for clients wishing to invest in crypto ETFs. These assessments must receive board approval and evaluate the investor's expertise and experience with virtual assets. Additionally, non-institutional clients must sign a risk warning letter before making their first purchase, ensuring they are fully informed of the potential risks involved.

The FSC's initiative comes in response to growing global demand for Bitcoin ETFs, particularly following substantial inflows into similar products in the U.S. market. By allowing professional investors access to these investment vehicles, Taiwan aims to enhance its competitive edge in the financial sector while ensuring robust investor protection measures are in place. The FSC will continue monitoring these developments to refine regulations and safeguard investor interests.