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29/11/24
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Taiwan Tightens AML Regulations for Crypto Sector Ahead of 2025 Deadline
Taiwan is set to implement stricter regulations concerning anti-money laundering (AML) practices within its cryptocurrency sector. The Financial Supervisory Commission (FSC) has accelerated the timeline for compliance, moving the registration requirement for crypto exchanges from January 1, 2025, to November 30 of this year. The decision follows recent penalties imposed on two cryptocurrency exchanges for breaches of existing AML laws.
Currently, the FSC has identified 26 approved virtual asset service providers (VASPs) that are permitted to operate under the previous regulations. However, under the new AML mandate, both registered and unregistered crypto businesses will need to comply with the updated requirements, emphasizing the urgency for all entities to submit their registration. The potential consequences for failure to register are significant, including up to two years of imprisonment or fines reaching 5 million New Taiwan dollars, equivalent to about $155,900.
To assist in compliance, the FSC has provided guidelines for exchanges to recognize and report suspicious transactions. The guidelines outline steps for identifying potentially problematic customers based on their names, bank account details, and location, as well as monitoring unusual activities such as fund splits and multiple account usage within the same IP address.
Furthermore, the commission recently levied fines against MaiCoin and BitoPro for shortcomings in customer due diligence, transaction monitoring, and maintaining accurate records regarding suspicious transactions. As part of the registration process under the new regulations, crypto businesses must complete a straightforward one-page form detailing their operational nature. Additionally, any business changes must be communicated to the relevant authorities within five days, accompanied by a commitment to establish a quality management system for effective financial oversight.
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