Taiwan’s New AML Laws Put Crypto Firms on Notice

The Financial Supervisory Commission (FSC) of Taiwan has introduced a set of new Anti-Money Laundering (AML) regulations that local virtual asset service providers (VASPs) must comply with by 2025. This move signals Taiwan’s commitment to enhancing regulatory oversight in the cryptocurrency sector.

New Regulations

On October 2, the FSC unveiled the updated AML measures, following earlier amendments proposed by the financial watchdog. There has been an expectation since March for Taiwan to roll out new crypto-related regulations, and these developments reflect a broader global trend of tightening regulations in the digital asset space.

The new regulations impose several requirements on crypto firms, including:

• Registration Deadline: All VASPs must register with the government by September 2025. Failure to comply could result in severe penalties, including a potential two-year prison sentence or fines of up to 5 million New Taiwan dollars (approximately $155,900).
• Implementation Date: Effective January 1, 2025, the new regulations will replace the existing system for Taiwanese VASPs. Companies that have previously completed the old AML compliance measures will still be required to meet the new standards and undergo the registration process.

In an effort to streamline compliance, the FSC advised VASPs to delay submitting their registration documents until the new system is fully implemented. This precaution is intended to avoid the need for reapplication under different rules.

As part of the new compliance framework, VASPs will also need to prepare an annual risk assessment report, which must be submitted to the appropriate government agency. This requirement is aimed at enhancing the transparency and accountability of crypto operations within Taiwan.

Looking ahead, the FSC plans to submit a new proposal for additional crypto-related laws by June 2025, with a draft expected to be released by the end of 2024. This proactive approach indicates the FSC’s commitment to keeping pace with the rapidly evolving crypto landscape.

Cointelegraph has reached out to the FSC for further information on its upcoming AML laws and has also contacted local Taiwanese law firms to understand the potential impact of these regulations on the local crypto community.

Expanding Taiwan’s Crypto Sector

In addition to the new AML regulations, the Taiwanese government is actively increasing its involvement in the cryptocurrency sector. On September 30, the FSC opened the digital asset exchange-traded fund (ETF) market to local professional investors.

This significant development aims to enhance Taiwan’s financial market competitiveness, aligning with similar efforts made by Hong Kong and Singapore. By allowing local professional investors access to digital asset ETFs, Taiwan is positioning itself as a progressive player in the Asian financial landscape.

Taiwan’s introduction of stringent AML regulations for cryptocurrency firms marks a pivotal moment in the country’s approach to digital assets. By requiring VASPs to register and comply with new standards by 2025, the FSC aims to bolster the integrity and security of the crypto market while mitigating risks associated with money laundering and other illicit activities.

As Taiwan continues to expand its regulatory framework and embrace digital asset innovation, it remains to be seen how these developments will shape the future of the cryptocurrency landscape in the region. With a focus on compliance and transparency, Taiwan is positioning itself to become a key player in the global crypto market.

Featured image credit: DALL-E by ChatGPT

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