• Taiwan’s FSC introduces strict AML rules for crypto firms.
  • Non-compliant firms face fines or imprisonment.

Taiwan’s Financial Supervisory Commission (FSC) has unveiled a comprehensive set of anti-money laundering (AML) rules. These rules specifically target cryptocurrency firms and are set to be enforced by 2025. The new regulations aim to bring order to the growing digital asset market. They require virtual asset service providers (VASPs) to comply with strict registration rules. Firms that fail to register will face hefty penalties. These penalties include fines of up to NT$50 million (around $1.5 million) or imprisonment for up to two years.

The key objective of these rules is to curb fraud and money laundering activities linked to virtual assets. Both domestic and international crypto firms will need to register for AML compliance with the FSC. Without proper registration, overseas platforms will face additional scrutiny. These measures are designed to not only monitor the industry but also deter potential abuse of virtual assets for illegal purposes.

How is Taiwan Advancing AML Rules and Investor Access?

The FSC’s proposed framework also introduces new legal categories that target money laundering through virtual assets and third-party payment accounts. This is a significant upgrade from the current laws, which mainly allow for administrative penalties. Under the draft law, non-compliance could result in criminal charges. The focus will also be on third-party services used for money laundering, ensuring the regulations cover various loopholes in the system.

In addition to tightening AML regulations, Taiwan has also made strides in improving access to virtual assets for professional investors. On September 30, 2024, the FSC allowed professional investors to access foreign virtual asset ETFs. This move highlights Taiwan’s balanced approach to crypto regulations. as the government seeks to promote growth while ensuring compliance with strict AML rules.

Taiwan’s Legislative Yuan will review these draft regulations in the coming months. Once passed, the new rules are expected to reshape how crypto firms operate within Taiwan, ensuring better compliance and reduced risks for investors and users.

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