Taiwan Regulator Drafts New AML Regulations for Crypto Firms

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Jimmy Aki

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Jimmy Aki

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Jimmy has nearly 10 years of experience as a journalist and writer in the blockchain industry. He has worked with well-known publications such as Bitcoin Magazine, CCN, Business2Community, and…

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Last updated:

October 3, 2024 13:09 EDT

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Taiwan’s Financial Supervisory Commission (FSC) introduced new anti-money laundering (AML) regulations for virtual asset service providers (VASPs) in October 3, 2024, requiring full compliance by September 2025.

Crypto firms that fail to meet this deadline could face penalties, including fines of up to 5 million New Taiwan dollars (approximately $155,900) or a potential two-year prison sentence.

Taiwan’s Regulator Poised to Shape Crypto Future

A recent FSC press release confirmed that the amended AML regulations mandate all crypto firms to complete their compliance registration by the September 2025 deadline.

Taiwan previously tightened its AML regulations for VASPs in July, but the new rules will fully replace the current system on January 1, 2025.

The updated regulations set higher standards for management teams, requiring those in leadership positions to meet stricter qualifications.

These policies also place greater emphasis on ensuring companies secure financial transactions and protect customer assets.

Additionally, crypto firms will be required to submit annual risk assessment reports to ensure they continuously meet Taiwan’s financial security standards.

In an effort to ease the transition, the FSC has advised VASPs to wait until the new system is fully implemented before submitting their documents, thereby preventing the need for multiple registration processes.

By June 2025, the FSC is expected to present a broader proposal for digital asset regulation, with a draft bill likely to be completed by the end of 2024.

This draft will help shape the legal framework for Taiwan’s crypto industry going forward.

These new regulations continue the amendments proposed earlier this year by Taiwan’s regulator.

In March 2024, local media UDN reported that FSC Chairman Huang Tien-mu pledged to introduce stricter regulations to protect investors and stabilize the digital asset market.

Taiwan VASP Rules Extend to Digital ETFs

In addition to the new AML regulations, Taiwan is expanding its involvement in the crypto sector.

On September 30, 2024, the FSC officially approved professional investors to engage with foreign virtual asset exchange-traded funds (ETFs).

This move aligns Taiwan with other global financial centers, such as Hong Kong and Singapore, which have also taken steps toward incorporating digital asset ETFs into their markets.

The FSC emphasized its commitment to closely monitoring the digital asset market with a focus on risk management and regulatory compliance.

Taiwan’s cautious approach restricts access to these high-risk investment products to professional investors only, ensuring that while the market expands, exposure to the potential volatility of digital assets remains controlled.