Taiwan intensifies its cryptocurrency AML regulations, introducing stricter registration requirements and penalties for noncompliance.
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Taiwan has expedited the implementation of its new Anti-Money Laundering (AML) regulations for cryptocurrency businesses following fines imposed on two crypto exchanges for noncompliance.
On November 27, the Financial Supervisory Commission (FSC) announced that the deadline for cryptocurrency exchanges to comply with the upcoming money laundering prevention registration requirement has been moved up to November 30, instead of the original deadline of January 1, 2025.
As per previous guidelines, virtual asset service providers (VASPs) that fail to register with the government could face penalties, including up to two years in prison or fines reaching 5 million New Taiwan dollars ($155,900).
The new mandate also applies to previously registered cryptocurrency businesses.
According to records from Taiwan's Financial Supervisory Commission (FSC), 26 crypto providers are currently authorized to continue operating. However, all crypto entities, regardless of prior registration, are now required to comply with the new Anti-Money Laundering (AML) registration mandate. The FSC stated:
“No business operators have completed the Money Laundering Prevention Registration under the VASP Registration Measures.”
The FSC also provided a checklist to help crypto exchanges identify suspicious transactions or activities. When assessing potential risks, crypto service providers must examine factors such as customer names and bank account information, IP address locations, the use of multiple trading accounts, and frequent changes to personal information, among other indicators.
Crypto exchanges in Taiwan have also been instructed to monitor unusual transaction activities, including but not limited to splitting funds, using multiple accounts from the same IP address, and transferring assets between accounts.
Cracking down on crypto exchanges that violate AML laws.
The Financial Supervisory Commission (FSC) fined MaiCoin and BitoPro on November 28 for failing to meet requirements related to customer due diligence (CDD), transaction monitoring, record-keeping, and reporting suspicious transactions, according to a Regulation Asia report.
To comply with Taiwan’s AML regulations, crypto service providers must submit a one-page form outlining the nature of their business operations.
The form specifies that any changes to the business or the provided information must be submitted to the Securities Over-the-counter (OTC) Trading Center within five business days.
Additionally, crypto businesses will be required to implement a quality management system to account for and audit their financial activities.