- Taiwan accelerates AML rules for crypto firms, requiring compliance by November 30 or face fines.
- Crypto exchanges in Taiwan must establish local offices and meet new AML standards for operation.
- Taiwan intensifies crypto regulation, including stricter customer due diligence and fraud prevention measures.
On November 30, new anti money laundering (AML) regulations for the cryptocurrency sector will go into effect in Taiwan. The regulations will be enforced by Taiwan’s Financial Supervisory Commission (FSC).
This pushes back the implementation date by a month, the original date being January 2025. The regulator wants to boost fraud prevention and compliance in the crypto space.
Registration Mandatory for Crypto Service Providers
The virtual asset service providers, such as crypto exchanges, must now register for AML compliance under the updated regulations. Failure to adhere could lead to consequences such as facing penalties of NT$5 million ($153,700) or being sentenced to a maximum of two years in prison. All VASPs operating in Taiwan must establish a local entity under the Company Act and complete AML registration.
Even companies already adhering to current AML standards must upgrade to meet the stricter requirements. The FSC emphasized that registration and compliance must occur before conducting any operations.
Strengthened Oversight and Additional Requirements
The updated rules extend beyond AML measures, adding requirements like administrative reporting and consumer protection. VASPs must also improve information security, handle customer complaints effectively, and maintain accurate transaction records. Clear procedures for listing and delisting assets must also be implemented to prevent unfair trading practices.
The FSC expects crypto platforms to detect unusual price movements and volume changes. It also plans to propose dedicated cryptocurrency legislation by mid-2025, with a draft set for release by late 2024.
Authorities Penalize Non-Compliance
On November 27, the FSC fined two local exchanges, MaiCoin and BitoPro, NT$1.5 million ($46,200) each for AML violations. The fines were due to insufficient customer due diligence and poor transaction data record-keeping.
The FSC also highlighted gaps in detecting suspicious transaction patterns and understanding clients’ wealth sources. Both exchanges accepted the fines and pledged to improve compliance.
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