Taiwan’s Financial Supervisory Commission (FSC) has moved up the implementation date for its crypto anti-money laundering (AML) regulations. The new laws will take effect on November 30, a month earlier than initially planned, as part of an effort to strengthen fraud prevention measures.
According to FSC statements, the new regulations mandate that crypto service providers, such as exchanges, complete AML compliance registration. Non-compliance may result in severe penalties, including imprisonment for up to two years and fines of up to NT$5 million.
The FSC also emphasized that overseas virtual asset service providers (VASPs) must establish a company or branch office under Taiwan’s Company Act and complete the required AML registration to function within the country.
Taiwan Advances Crypto AML Rules to Combat Rising Violations
In October, FSC Chair Jin-Lung Peng explained that the decision to advance the AML regulations was driven by the urgency to enhance fraud prevention measures in light of rising violations.
The new rules aim to address various issues, including custody of fiat currency, information security, customer complaint handling procedures, record-keeping, and information disclosure.
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Kevin Cheng, a crypto lawyer and Secretary General of the Taiwan Fintech Association, noted, “The new law imposes stricter regulatory oversight for existing VASPs.” He added that companies must now comply with broader requirements beyond AML measures, covering areas such as administrative reporting, information security, and consumer protection.
Just days ago, FSC investigations resulted in fines totaling NT$1.5 million for two crypto exchanges, MaiCoin and BitoPro, due to AML violations. These violations included lapses in customer due diligence (CDD), transaction monitoring, record-keeping, and identifying suspicious transactions.
The FSC alleged that the exchanges had failed to enhance customer due diligence, lacked sufficient understanding of clients’ sources of wealth, maintained inadequate transaction data records, and were unable to effectively detect suspicious transaction patterns.
Both exchanges have conceded to address the regulatory shortcomings identified by the FSC.
Also Read: Hong Kong Eliminates Crypto Taxes to Attract Hedge Funds
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