The Taiwanese authorities recently announced plans to implement stricter anti-money laundering (AML) regulations for cryptocurrency firms to combat fraud and money laundering risks within the virtual asset landscape. The Ministry of Justice has proposed amendments to existing AML laws that mandate domestic and overseas crypto firms operating in Taiwan to register for AML compliance. Failure to comply could result in imprisonment for up to two years and fines reaching $1.5 million. The proposed amendments include regulations targeting fraud prevention, money laundering prevention, technology investigation and security, and communications security and supervision. The new money laundering prevention law outlines harsher penalties for noncompliance among Virtual Asset Service Providers (VASPs), introducing stricter registration requirements and limitations for domestic and international currency dealers.
Under the proposed amendments, VASPs risk imprisonment if they provide services without proper registration. Overseas crypto platforms must establish local entities and apply for AML registration to avoid criminal penalties. Additionally, the proposed amendments will include cryptocurrency within existing AML laws, with offenders using cryptocurrency for money laundering facing prison terms ranging from six months to five years, alongside fines of up to $1.5 million. The Legislative Yuan, Taiwan’s national parliament, will review the proposed amendments, with the aim of elevating violations by noncompliant crypto firms to criminal offenses potentially resulting in imprisonment.
Taiwan previously initiated AML rules for cryptocurrency service providers in July 2021 under the Financial Supervisory Commission. The latest proposal follows plans announced on March 4 regarding new laws for digital assets to be introduced by September 2024. Furthermore, Taiwan’s crypto sector is moving towards industry self-regulation, with the formation of an industry association approved by the Ministry of the Interior in March. Key players in the crypto industry have joined forces to establish the association, aiming to strengthen the industry and enhance cooperation with regulatory bodies. The Financial Supervisory Commission also granted Taiwan’s inaugural security token offering license to Cathay Securities, empowering the issuance of tokenized green bonds valued at $930,000 every six months.
In response to the increasing risks of fraud and money laundering in the virtual asset landscape, Taiwan’s Ministry of Justice has proposed amendments to existing AML laws to impose stricter regulations on cryptocurrency firms. The proposed amendments mandate registration for AML compliance for both domestic and overseas crypto firms operating in Taiwan, with penalties of imprisonment and fines for noncompliance. The new regulations target fraud prevention, money laundering prevention, technology investigation and security, and communications security and supervision, advocating for harsher penalties for noncompliant VASPs and the inclusion of cryptocurrency within existing AML laws. The proposed amendments aim to elevate violations by noncompliant crypto firms to criminal offenses, potentially resulting in imprisonment, as the Legislative Yuan reviews the changes.
As part of Taiwan’s efforts towards crypto regulation and industry self-regulation, the Financial Supervisory Commission introduced AML rules for cryptocurrency service providers in July 2021. With plans to introduce new laws for digital assets by September 2024, Taiwan is taking steps towards enhanced regulation within the crypto industry. The formation of an industry association approved in March aims to strengthen collaboration with regulatory authorities, with key players in the crypto industry joining forces to enhance cooperation and industry development. Additionally, the grant of Taiwan’s inaugural security token offering license to Cathay Securities signifies a significant milestone in the tokenization of assets within the country, empowering the issuance of tokenized green bonds every six months.
