Taiwan’s Financial Supervisory Commission (FSC) has drafted new anti-money laundering (AML) regulations for cryptocurrency firms following recent legal amendments. These regulations mandate that virtual asset service providers (VASPs) register with the FSC by September 2025. Non-compliance could result in penalties, including imprisonment for up to two years.
The FSC’s new rules will replace the existing AML regulations introduced in July 2021. The changes relate to all VASPs and do not depend on whether they have filled in the previous compliance declaration. The FSC also pointed out that all providers are bound by the new registration rules and must register.
These new rules will come into force on January 1, 2025. However, it is anticipated that the VASPs will finalize the registration for AML by September 2025. Those who refuse to follow the new regulation could be fined up to NT$5 million ($155,900) and receive a prison term of up to two years.
Taiwan Tightens Crypto Regulations, Targets Enhanced Security and Compliance
Kevin Cheng, a crypto lawyer and secretary general of the Taiwan Fintech Association, said the new rules would penalize operators who fail to conform. However, those companies that will become compliant will be subjected to even higher regulatory requirements. He pointed out that the regulations are intended to eventually move the Taiwan crypto industry closer to the model of licensed financial institutions.
Besides the typical AML standards, the new measures introduced requirements for the management teams of VASPs. These regulations also bring new corporate duties of transaction security, protection of consumer assets, and information security. According to Cheng, these rules increase new firms’ entry costs but provide incumbent firms with more legal support. He stated that this would make Taiwan crypto attractive to large investors used to the traditional financial systems.
On the other hand, the FSC is working on an entirely different law proposal for crypto assets that it aims to present to Taiwan’s Executive Yuan by June 2025. The FSC hopes to have the outline of this proposal ready before the close of this year.
With the recent changes, the Taiwan cryptocurrency industry will receive more intense regulation. It is considered a better structure in the future, which will attract more institutional investors from the market.
