Taiwan Implements Strict Anti-Money Laundering Rules for Crypto on November 30
Taiwan has expedited its regulatory framework by implementing stringent anti-money laundering (AML) rules effective November 30, a month ahead of schedule. The Financial Supervisory Commission (FSC) will enforce measures aimed at strengthening the digital asset landscape against financial misconduct.
These regulations require virtual asset service providers (VASPs) to complete comprehensive AML compliance registration. Non-compliance may result in penalties, including imprisonment for up to two years and fines up to NT$5 million (approximately $153,700).
Overseas VASPs must establish a formal company or branch office under Taiwan's Company Act and obtain mandatory AML registration before operations. This regulatory strategy reflects Taiwan's commitment to creating a transparent digital financial environment.
FSC's New Rules Strengthen Security
Jin-Lung Peng, FSC chair, emphasized the urgency of these regulations during an October parliamentary session, addressing societal demands for improved fraud prevention. The VASP registration system aims to ensure financial integrity through a comprehensive legal framework.
Hsi-Ho Huang, director at FSC, detailed the multifaceted approach at a Taipei conference, indicating that new regulations will enhance scrutiny across areas such as fiat currency custody, information security, customer complaint management, record-keeping, and transparent information disclosure.
Trading platforms are now required to establish clear protocols for crypto asset listing and delisting, along with mechanisms to prevent unfair trading practices and detect abnormal price and volume fluctuations.
Local Exchanges Face Fines for AML Violations
Kevin Cheng, a crypto legal expert, noted that VASPs face expanded obligations under the new regulations. He stated, “The new law imposes stricter regulatory oversight for existing VASPs... requiring additional obligations beyond anti-money laundering measures, such as administrative reporting, information security, and consumer protection.”
Recent enforcement actions included fines of NT$1.5 million each for local exchanges MaiCoin and BitoPro due to significant AML violations, which involved lapses in customer due diligence, inadequate understanding of wealth sources, poor transaction record-keeping, and limited detection of suspicious transactions.
In response, MaiCoin pledged to implement corrective measures focused on user asset protection and operational continuity. BitoPro formed a dedicated task force to enhance internal audits, employee training, and compliance awareness initiatives.