Taiwan FSC Announced New AML Rules For Cryptocurrency Firms

• The FSC has set new rules for all VASPs to complete AML compliance registration in Taiwan by September 2025. 
• Non-compliant crypto firms must pay fines of up to $155,900 and 2 years in jail.
• New FSC rules will enhance transaction and asset security.

Taiwan’s Financial Supervisory Commission (FSC) has set new anti-money laundering (AML) regulations for virtual asset service providers (VASPs). These stringent AML rules will take effect from January 1, 2025. 

Now, crypto firms must register with FSC until September 2025 under new AML rules. Any crypto firm failing to follow these rules has to face harsh penalties. This is an initiative from FSC to combat ongoing illegal activities in the crypto sector. 

The FSC stated on Wednesday that these AMC rules will replace the anti-money laundering (AML) declarations implemented in July 2021. Every VASP needs to follow the updated registration guidelines regardless of their current compliance. 

The new AML rules require leaders to have specific qualifications and responsibilities to ensure transaction security. Also, it will focus on protecting consumer crypto assets in Taiwan. 

New AML Rules Set By Taiwan FSC 

The Financial Supervisory Commission (FSC) recently announced new AML rules and regulations for crypto firms. All virtual asset service providers (VASPs) must register with FSC by September 2025 under new AML rules. 

Virtual asset exchanges, trading platforms, custodians, and transfer providers must register under the recent FSC’s proposed rules in Taiwan. These new AML rules will categorize VASPs into specific business categories. 

Each category must experience a separate registration process within nine months of the rules coming into force. 

Also, VASPs need to submit an annual risk assessment report to the Virtual Currency Business Association. Their Internal control and audit systems should meet the AML standards included in the rules.

Virtual asset custodians need to isolate customer and company funds for security reasons. Then, VASPs need to put wallet mechanisms in place to improve the safety of their information technology. 

FSC’s new AML rules will take effect on January 1, 2025. Crypto firms have until September 2025 to register and operate under new rules. FSC is set to collaborate with the Taiwan Virtual Asset Service Provider Association to help companies meet these new responsibilities.

The new AML rules by FSC will surely provide stronger legal protection for the development of Taiwan’s crypto industry. 

Penalties For Non-Compliance 

The FSC has warned crypto firms in Taiwan that they would face harsh penalties if they failed to comply with new anti-money laundering (AML) regulations. Kevin Cheng, Secretary General of the Taiwan Fintech Association, has confirmed non-compliant crypto firms will face criminal charges.

There is a fine of up to NT$5 million (approximately $155,900) for non-compliance with new AML rules. Also, non-compliant VASPs will go to jail for up to two years. So, Taiwan’s crypto firms have enough time to register under the new framework. 

Other lawyers have appreciated the FSC for tightening the rules. They said this FSC’s move would increase trust for virtual asset companies in Taiwan. 

Better Crypto Regulation in Taiwan

Taiwan has set an example for responsible crypto asset growth by implementing new AML rules. Also, they have formed an association to develop regulations under government guidance in July 2024. 

In the future, the partnership between regulators and businesses will form a safer environment for crypto firms. 

Also, the new AML rules will surely attract large-scale investors to the crypto industry. FSC plans to provide a draft proposal on Crypto law to the Executive Yuan before June 2025. 

Taiwan’s latest AML regulations will align with international AML standards. It will facilitate cooperation with other countries in combating financial crimes. 

FSC is working on guidelines for managing cross-border crypto transactions to ensure they comply with local and international regulations.

Disclaimer

The information in this article is for informational purposes only. It does not constitute financial or investment advice for the readers. Readers are advised to invest in cryptocurrencies after doing their own research. The prices of different crypto assets are volatile in nature. These assets carry the inherent risk of financial loss.