Taiwan to enforce new crypto AML regulations on November 30
Taiwan's new Anti-Money Laundering (AML) rules for cryptocurrency companies were advanced after two cryptocurrency exchanges were fined by authorities for violations.
As the regulator pushes forward with its fraud prevention efforts, Taiwan's Financial Supervisory Commission (FSC) will implement new AML regulations on November 30, one month ahead of schedule. The previous deadline by the agency was January 1, 2025.
Crypto firms previously registered included in the new AML mandate
Crypto service providers, such as cryptocurrency exchanges, must register for AML compliance under the new regulations. Penalties for noncompliance include a fine of up to NT$5 million ($153,700) and up to two years in prison. Records from the Taiwan FSC show that 26 cryptocurrency providers are presently authorized to carry on providing their services. The new AML mandate requires all crypto entities, whether or not they have already registered, to do so.
Before operating in Taiwan, foreign "virtual asset service providers" (VASPs) must register as a company or branch office under Taiwan's Company Act and complete the necessary AML registration, the FSC said in a statement on Wednesday. After the laws were amended in July, the regulator released these new rules.
During a parliamentary session in October, FSC chair Jin-Lung Peng stated that the decision to expedite the AML system was made in response to pressing public demands for more robust fraud prevention measures. The VASP registration system is a component of a larger legal framework designed to fight fraud, Peng continued.
Taiwan to tighten security on key areas
At a conference in Taipei earlier this month, Hsi-Ho Huang, director of the FSC's securities firms division, stated that the new regulations, which are soon to go into effect, are intended to increase the regulator's supervision of key areas such as the custody of fiat currency, customer complaint handling protocols, information security, record keeping, and information disclosure.
According to Huang, cryptocurrency trading platforms need to set up clear and specific procedures for listing and delisting cryptocurrency assets. They also need to take precautions against unfair trading and identify unusual price and volume.
Taiwan cracks down on cryptocurrency exchanges that violate AML regulations
Taiwan has also taken action against current VASPs that do not comply. Both BitoPro and MaiCoin, two significant local cryptocurrency exchanges in Taiwan, were fined NT$1.5 million ($) on Monday for breaking AML rules.
According to the FSC, the two exchanges were unable to improve customer due diligence, had a poor grasp of the sources of wealth of their clients, kept poor records of transaction data, and were unable to recognize suspicious transaction patterns. BitoPro said a special task force has been formed to address the deficiencies that the FSC has identified.
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