Taiwan Accelerates Crypto AML Regulations To Nov. 30

Taiwan has accelerated the introduction of its regulatory Anti-Money Laundering (AML) framework for crypto businesses. The new regulations, set to start nearly a month in advance, require Virtual Asset Service Providers (VASPs) to comply with the registration mandate to prevent stricter penalties.

Taiwan Fast-Tracks New AML Mandate

Taiwan’s Financial Supervisory Commission (FSC) recently announced it would advance the implementation of its crypto AML registration regulation from January 1, 2025, to November 30, 2024.

The AML overhaul, announced in October, will introduce stricter AML guidelines for VASPs and require all crypto firms to complete the AML registration with the Taiwanese government by September 2025.

The businesses that fail to register will not be authorized to offer services in the country and could face a two-year prison sentence or fines of up to 5 million NTD, worth around $155,000.

Per the new regulations, the listing and delisting of digital assets will be closely monitored, and crypto firms are expected to establish measures against illicit trading and report any suspicious activity related to trading volume and price movement.

Moreover, FSC requires registered crypto service providers to prepare an annual risk assessment report and detail client assets. The regulator mandated digital asset custodians to hold customer assets in trust or separate them from the platform’s assets.

To register, firms must submit a form that outlines their business nature. Any changes to the information provided in this form should be updated within five business days with the Securities Over-the-counter (OTC) Trading Center.

The new regulatory framework will replace Taiwan’s current system for VASPs. Companies that completed the previous AML regulations must comply with the new system and complete the registration process.

After the announcement, the FSC fined two local exchanges, MaiCoin and BitoPro, for violating AML guidelines related to customer due diligence (CDD), transaction monitoring, record-keeping, and suspicious transaction reporting.

More Crypto-Related Laws To Come

This year, Taiwan has been working to update its regulatory framework to implement crypto-related laws that expand on its seemingly cautious but friendly approach. The country’s Ministry of Finance recently announced it would work on a framework that addresses crypto tax evasion.

As reported by Bitcoinist, Finance Minister Chuang Tsui-yun and Director-general of the Taxation Administration Sung Hsiu-ling pledged to review the current regulations within the next three months to “better enable the government to tax cryptocurrency gains.”

The finance minister admitted that the country had not implemented a system that effectively collects digital asset-related taxes from individuals despite having policies to collect business and corporate income taxes from the 26 crypto exchanges that completed the AML registration.

Legal experts noted that the financial authorities might face challenges addressing this issue with the current tax laws as investors can evade scrutiny “by disguising the transactions as overseas activity conducted in U.S. dollars.” As a result, Taiwan’s regulators must amend these regulations to address crypto tax evasion.

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