The AML rules were set to go into force next year, but recent breaches have spurred the FSC to speed up its implementation.
Taiwan’s Financial Supervisory Commission (FSC) is set to enforce new anti-money laundering (AML) rules for cryptocurrency service providers starting November 30.
These regulations require crypto exchanges and virtual asset service providers (VASPs) to register for AML compliance.
AML Framework
Initially, the deadline for mandatory AML registration was January 1, 2025, but the FSC moved it up by one month.
In a statement on November 28, the FSC emphasized that overseas companies offering virtual asset services in Taiwan must establish a local presence and complete the AML registration process under the Company Law.
Currently, 26 crypto providers are approved to operate in Taiwan, but all—registered or not—must adhere to the updated AML guidelines.
To aid compliance, the FSC provided a checklist to help platforms identify suspicious activities. Providers must monitor customer details, including names, bank account information, IP locations, and account usage patterns.
Additionally, they must watch for irregular transaction behaviors, such as frequent account information changes, fund splitting, or multiple accounts originating from the same IP address.
Non-compliance carries severe penalties, with fines reaching NT$5 million ($153,700) and imprisonment for up to two years.
This crackdown follows recent penalties imposed on two local crypto exchanges, MaiCoin and BitoPro, for violating AML rules.
On November 27, both exchanges were fined NT$1.5 million each for failing to enhance customer due diligence, lacking sufficient knowledge of customers’ sources of wealth, inadequate transaction record-keeping, and ineffective identification of suspicious transactions.
A Balanced Approach
Taiwan is advancing its cryptocurrency regulations to position itself as a leader in the digital asset sector.
In September 2022, the FSC introduced ten guiding principles for VASPs, aiming to improve transparency through better information disclosure, set clear listing and delisting standards, and ensure the proper segregation and custody of client and company funds.
More recently, the FSC announced a registration system requiring crypto exchanges to register with the Taiwanese government by September 2025.
While tightening oversight, the government is also fostering growth in the crypto sector. Last month, the FSC allowed professional investors to access exchange-traded funds (ETFs) linked to foreign digital assets.
In addition, the regulator is preparing a pilot program for institutional cryptocurrency custody, with applications opening in early 2025. Three private banks have already shown interest in participating in this initiative.
