Taiwan Crypto AML Rules: $155K Fines for Non-Compliance
Taiwan Crypto AML Rules– Taiwan is stepping up its regulatory efforts for the cryptocurrency sector with new Anti-Money Laundering (AML) measures aimed at strengthening compliance. The Financial Supervisory Commission (FSC) has announced that the deadline for crypto businesses to register under the country’s updated AML framework has been moved forward to November 30, 2024, from the original deadline of January 1, 2025.
Taiwan’s New AML Rules for Crypto Service Providers
The updated rules apply to all virtual asset service providers (VASPs) operating in Taiwan, including those already established in the market. Under the new regulations, all crypto-related businesses must comply with AML registration requirements, which include detailed customer due diligence (CDD) procedures and transaction monitoring.
Non-Compliance Can Lead to Hefty Fines or Jail Time
Crypto businesses that fail to comply with the new AML rules could face significant penalties. The FSC has made it clear that violators could be fined up to $155,900 (5 million New Taiwan dollars) or face a prison sentence of up to two years. The push to implement stricter regulations follows recent fines imposed on local exchanges for failing to adhere to AML requirements.
Currently, 26 crypto providers are approved to operate in Taiwan, but none have completed the mandatory AML registration process.
FSC Issues Checklist for Exchanges to Combat Suspicious Activity
The FSC has issued a comprehensive checklist to help exchanges detect suspicious activities, including monitoring customers’ names, IP addresses, and bank account details. The commission has also highlighted certain behaviors that should raise red flags, such as:
- Fund splitting
- Multiple accounts linked to the same IP address
- Frequent transfers of digital assets
Recent Fines for Violations of AML Rules
The stricter regulatory environment follows penalties against two major Taiwanese exchanges, MaiCoin and BitoPro, for violating key aspects of customer due diligence, transaction monitoring, record-keeping, and suspicious activity reporting. These fines emphasize the FSC’s commitment to enforcing robust AML procedures across the crypto sector.
Requirements for Crypto Service Providers Under New AML Rules
In order to comply with the new AML regulations, all crypto service providers must submit a registration form detailing their business operations. Any changes to the submitted information must be reported to the Securities Over-the-counter (OTC) Trading Center within five business days.
Moreover, these businesses will need to establish strong management systems for financial auditing and accounting, ensuring they meet the latest regulatory standards.
Taiwan’s Growing Push for Crypto Regulation
Taiwan’s efforts to tighten crypto regulation are part of a broader strategy to position itself as a global cryptocurrency hub. As part of this initiative, the FSC is working on introducing a registration system for cryptocurrency exchanges, with the deadline set for November 30, 2024.
In addition, Taiwan’s regulatory body is planning to launch a trial for crypto custody services through local banks. The trial is expected to begin in the first quarter of 2025, with three private banks already expressing interest in participating.
Increased Scrutiny on Offshore Crypto Exchanges
As part of the new regulations, Taiwan is set to impose restrictions on offshore cryptocurrency exchanges operating within its jurisdiction unless they secure the necessary registration. This move is part of Taiwan’s ongoing efforts to strengthen its regulatory framework and establish a more secure environment for digital assets.
Self-Regulatory Framework for VASPs
In September of the previous year, Taiwan’s FSC drafted ten guiding principles for Virtual Asset Service Providers(VASPs) to establish their own self-regulatory rules. These principles are expected to be officially released by the end of this month, focusing on key areas such as transparency, anti-money laundering measures, and operational security.
Taiwan’s Stricter Crypto Regulations Set to Shape Industry Future
Taiwan’s regulatory framework for cryptocurrencies is evolving quickly, with the implementation of these new Anti-Money Laundering measures signaling a more stringent approach to the sector. As the deadline for AML registration approaches, crypto service providers operating in Taiwan will need to meet compliance requirements to avoid heavy penalties. With the country’s goal of becoming a global crypto hub, the regulatory landscape is likely to continue evolving, which could have significant implications for both local and international crypto firms operating in the region.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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