As a seasoned crypto investor with a knack for navigating the ever-evolving regulatory landscape, I find Taiwan’s recent move towards stricter anti-money laundering regulations for virtual asset service providers (VASPs) both reassuring and challenging.
The Financial Supervisory Commission of Taiwan has proposed fresh guidelines aimed at preventing money laundering, specifically for companies providing services related to virtual assets. These rules must be adhered to in the near future; otherwise, non-compliance may result in fines or other penalties.
Based on a recent statement, the Financial Services Commission (FSC) has unveiled a proposal for the ‘Registration Regulations for Virtual Asset Service Providers’ that will become effective starting January 1, 2025.
These actions are taken based on modifications to the Anti-Money Laundering (AML) Act, which occurred in July 2024, and are a component of Taiwan’s wider initiatives aimed at controlling the expanding cryptocurrency market.
As a researcher, I’ve noticed that unlike the previous Anti-Money Laundering (AML) regulations, these new ones specifically focus on cryptocurrency-related businesses. This means that entities such as crypto exchanges, trading platforms, and custodians are now required to register and adhere to more stringent AML procedures. In simpler terms, we’re looking at a shift where these virtual asset service providers will need to comply with tougher anti-money laundering measures.
Under the latest regulations, Virtual Asset Service Providers (VASPs) are required to prepare an annual risk assessment report and establish internal control and auditing mechanisms for enhanced security measures.
Penalty for non-compliance
As a crypto investor, I understand that Virtual Asset Service Providers (VASPs) who have already complied with Anti-Money Laundering (AML) regulations under Taiwan’s current laws are required to register within three months of the new law taking effect. For those firms that are yet to comply, including new entrants, it is crucial to complete your registration by the deadline of September 30, 2025, to steer clear of any penalties.
As reported by local news outlets, 26 businesses have already submitted their compliance declarations. Failure to register on time may result in imprisonment for up to two years and a fine of up to NT$5 million ($156,140). Previously, the penalties for non-compliance were solely fines.
According to the FSC, they’re planning a detailed legislation specifically for digital assets, which they aim to complete by the end of 2024. This draft legislation is expected to be finalized and then presented to the Executive Yuan by mid-2025.
Under this unique legislation, we’ll see additional rules being enforced, including minimum capital levels, specific qualifications for staff, and various quality benchmarks.
As an analyst, I’ve been closely monitoring the crypto market’s evolution, following Chairman Huang Tianzhu’s earlier caution about a potential increase in illicit activities within this sector. He also advocated for stricter penalties against platforms that fail to adhere to regulations. Interestingly, he emphasized that cryptocurrencies do not have any direct link to the real economy.
In simpler terms, Taiwan is moving forward by adopting digital asset investment trends on a global scale. As of September 30th, their Financial Supervisory Commission has given permission for professional investors, such as institutional investors and wealthy individuals, to invest in foreign crypto exchange-traded funds through local brokers.
In June, authorities granted permission for BitoGroup (Taiwan’s crypto exchange BitoPro’s parent company) to collaborate with Far Eastern International Bank, enabling them to offer cryptocurrency-compatible bank accounts. This means investors can now utilize banking services when transferring funds to the exchange.
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2024-10-03 14:02