Taiwan FSC Implements new AML Rules for Crypto Firms
Virtual asset service providers must comply with the new anti-money laundering legislation that Taiwan's Financial Supervisory Commission has adopted or face penalties.
According to a recent release, the FSC has reportedly published a draft of the “VASP Registration Regulations,” which will go into force on January 1, 2025.
These actions come after the AML Act was modified in July 2024 as part of Taiwan's larger initiatives to control the expanding cryptocurrency industry.
In contrast to previous anti-money laundering legislation, the new rules specifically target companies involved in cryptocurrency trading and require virtual asset service providers, including custodians, trading platforms, and cryptocurrency exchanges, to register and adhere to more stringent anti-money laundering procedures.
As part of the new regulations, VASPs must build up internal control and audit systems and submit yearly reports on risk assessments.
Penalty for Non-Compliance
Within three months of the law's implementation date, VASPs that have already finished compliance disclosures under Taiwan's previous AML legislation must register under the new one.
In order to avoid penalties, other firms—including new entrants—must finish their registration by September 30, 2025.
According to the local media, twenty-six companies have already finished their compliance filings. These entities risk up to two years in prison and a maximum punishment of NT$5 million (approximately $156,140) for failing to register on time.
Prior to now, the only sanctions available for non-compliance were fines. A complete “special law” for virtual assets is reportedly being drafted, according to the FSC. By the end of December 2024, a final draft of this law should be completed and submitted to the Executive Yuan by June 2025.
Additional rules about capital requirements, hiring criteria, and other norms will be implemented under the special law.
The event comes as FSC Chairman Huang Tianzhu previously warned about a spike in illegal activity in the cryptocurrency field and demanded more severe punishments for noncompliant exchanges.
He also stated that cryptocurrencies have no direct link to the real economy. Taiwan is also gradually lining up with international markets welcoming investments in digital assets.
On September 30, the FSC let local brokers provide access to foreign cryptocurrency exchange-traded funds for professional investors, including institutional and high-net-worth individuals.
BitoGroup, the parent firm of the Taiwanese cryptocurrency exchange BitoPro, was granted permission by regulators in June to launch cryptocurrency-friendly bank accounts in collaboration with Far Eastern International Bank. This initiative enables investors to utilize banking services while sending funds to the exchange.
