Global: Taiwan Tightens AML Rules for Crypto Providers with Accelerated Registration Deadline

Taiwan has ramped up its anti-money laundering (AML) measures for cryptocurrency businesses, introducing stricter registration requirements and advancing the enforcement timeline.

Accelerated AML Compliance Timeline

The Financial Supervisory Commission (FSC) announced on November 27 that the deadline for crypto providers to comply with the new AML registration mandate has been moved to November 30, 2024, from the initial January 1, 2025, target.

Non-compliance with the mandate could result in severe penalties, including fines of up to 5 million New Taiwan dollars ($155,900) or a two-year prison sentence.

Expanded Scope for Registration

The new AML requirements apply to all Virtual Asset Service Providers (VASPs), regardless of prior registration status. The FSC confirmed that none of the 26 approved crypto providers in Taiwan had completed the mandatory Money Laundering Prevention Registration under the updated measures.

Crypto entities are required to submit detailed information about their operations and notify the Securities Over-the-Counter (OTC) Trading Center of any business changes within five days.

Monitoring and Compliance Measures

To enhance compliance, the FSC provided a comprehensive checklist for identifying and reporting suspicious activities. Key indicators include:

• Tracking names, bank accounts, and IP addresses.
• Monitoring multiple trading accounts or frequent account information changes.
• Detecting unusual transactions, such as fund splitting or asset switching across multiple accounts.

These measures aim to strengthen the oversight of crypto transactions and ensure robust safeguards against illicit activities.

Crackdown on Violations

The FSC’s stricter stance follows recent enforcement actions against two crypto exchanges, MaiCoin and BitoPro, for failing to meet AML requirements. Both were penalized for deficiencies in customer due diligence, transaction monitoring, record-keeping, and suspicious transaction reporting.

Quality Management and Oversight

Crypto providers must now implement a quality management system for financial accounting and auditing. This requirement underscores Taiwan’s commitment to maintaining transparency and accountability within its cryptocurrency ecosystem.

As Taiwan accelerates its AML efforts, the regulatory push signals a strong intent to create a secure and compliant environment for virtual asset operations.