New Anti-Money Laundering Regulations in Taiwan
Taiwan’s Financial Supervisory Commission (FSC) has drafted new anti-money laundering (AML) regulations following amendments made to existing laws in July. These regulations require cryptocurrency firms to register by the end of September next year, with non-compliance potentially resulting in penalties, including imprisonment for up to two years.
In a statement released on Wednesday, the FSC specified that the regulations explicitly target virtual asset service providers (VASPs) and mandate them to complete AML registration. While VASPs currently adhere to AML laws based on FSC rules from July 2021, the new regulations are set to replace these existing rules.
The new regulations will take effect on Jan. 1, 2025, and all VASPs must complete their AML registration by the end of September 2024. Failure to comply could result in imprisonment for up to two years and fines up to NT$5 million ($155,900), as reported by local media.
Kevin Cheng, a crypto lawyer and secretary general of the Taiwan Fintech Association, indicated that non-compliant operators will face criminal liability, while compliant operators will encounter stricter regulatory obligations. Cheng stated, “The entire industry environment will gradually move towards the model of licensed financial institutions.”
Additionally, these new regulations stipulate qualifications for the management team, alongside corporate responsibilities such as transaction security, consumer asset protection, and information security. Cheng remarked that these rules raise barriers for new entrants and ongoing operations in the industry: “The new regulations provide stronger legal protection for the development of Taiwan's crypto industry, making it more attractive for large investors accustomed to traditional finance.”
The FSC is also considering a law proposal specifically for crypto assets, which they plan to submit to the Executive Yuan, Taiwan's highest administrative organ, in June next year. Local reports indicate the FSC aims to complete the draft proposal by the end of this year.
In June, the local crypto sector formed an industry association to create self-supervisory rules aligned with government guidelines.
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