The Financial Supervisory Commission (FSC) of Taiwan has announced that it will be implementing new anti-money laundering (AML) regulations for the cryptocurrency sector on November 30, a month earlier than originally planned.
This expedited timeline underscores the regulator’s heightened sense of urgency in addressing potential money laundering and fraud concerns within Taiwan’s rapidly evolving decentralized digital asset market.
The FSC’s decision to move up the implementation date reflects its determination to establish a robust AML framework that can keep pace with the swift growth and increasing mainstream adoption of cryptocurrencies in the country.
Taiwan Seeks to Balance Crypto Support and Regulatory Oversight
In parallel with the introduction of these new AML rules, Taiwan has also taken steps to actively support and integrate cryptocurrency usage within its financial ecosystem.
Local media reports indicate that the country plans to adopt crypto custody services through its domestic banking network in the coming year.
This indirect approach to regulating the crypto landscape aims to strike a balance between addressing potential money laundering risks, while also fostering the growth and mainstream acceptance and dominance of digital assets in Taiwan such as Bitcoin.
By providing institutional-grade custody solutions, the government seeks to create a more secure and trusted environment for cryptocurrency transactions and usage.
Compliance Requirements and Penalties for Non-Compliance
The new AML regulations mandate that all cryptocurrency service providers, including digital asset exchanges, must complete thorough anti-money laundering compliance registrations.
This requirement underscores the FSC’s commitment to bringing greater transparency and accountability to the crypto sector within Taiwan’s jurisdiction.
Failure to comply with these new rules could result in severe penalties, including up to two years in prison and fines above $150,000.
The implementation of these stringent measures sends a clear message that the Taiwanese government will not tolerate any attempts to exploit cryptocurrencies for illicit financial activities.
Targeting Overseas Crypto Firms and Domestic Enforcement Actions
The new regulations also target overseas “virtual asset service providers” (VASPs), requiring them to establish a registered company or branch under Taiwan’s company law and complete the necessary AML compliance registration before they can conduct business in the country.
This demonstrates Taiwan’s commitment to applying consistent AML standards across all cryptocurrency-related operations, regardless of their geographic origin.
Furthermore, the FSC has already taken enforcement actions against non-compliant local cryptocurrency exchanges, fining MaiCoin and BitoPro NT$1.5 million each for violations such as inadequate customer due diligence and insufficient transaction data record-keeping.
These enforcement actions serve as a clear warning to all crypto firms operating in Taiwan, underscoring the regulator’s resolve in ensuring strict adherence to the new AML requirements.