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Taiwan Accelerates Crypto AML Regulations, Imposes Strict Registration Rules

Taiwan Accelerates Crypto AML Regulations, Imposes Strict Registration Rules

Taiwan's Financial Supervisory Commission (FSC) has expedited the implementation of new anti-money laundering (AML) regulations for cryptocurrency businesses, moving the enforcement date up to November 30 from the previously planned January 1, 2025.

The swift action follows the FSC’s recent fines imposed on two local cryptocurrency exchanges, MaiCoin and BitoPro, for violations related to AML compliance. The regulatory body aims to strengthen oversight of virtual asset service providers (VASPs) amid growing concerns over crypto-related financial crimes.

Under the new mandate, all crypto entities operating in Taiwan, whether previously registered or not, are required to complete a formal registration process in accordance with the updated AML regulations. Failure to comply could result in severe penalties, including up to two years in prison or fines of up to 5 million New Taiwan dollars ($155,900).

According to FSC records, 26 crypto providers are currently approved to continue offering their services. However, the FSC emphasized that “no business operators have completed the Money Laundering Prevention Registration under the VASP Registration Measures.” This indicates that all existing and new crypto businesses must adhere to the new registration requirements without exception.

The regulatory framework mandates that crypto service providers submit a concise, one-page form detailing the nature of their operations. Any changes to the business or the information provided must be reported to the Securities Over-the-Counter (OTC) Trading Center of the Republic of China within five business days. Additionally, crypto businesses are obligated to establish a quality management system for accounting and auditing their finances.

To enhance the detection and prevention of illicit activities, the FSC provided a checklist of attributes that crypto exchanges should use to identify suspicious transactions or customers. This includes scrutinizing names and bank account details, monitoring IP address locations, tracking multiple trading accounts linked to a single user, and noting frequent changes in personal information.

Crypto exchanges are also instructed to monitor for unusual transaction activities. Red flags include the splitting of funds into smaller amounts, the use of multiple accounts accessing the platform from the same IP address, and the rapid switching of assets between accounts. These measures are designed to prevent common tactics employed in money laundering schemes.

This move also comes as Taiwan prepares to trial crypto custody services through local banks in 2025, signaling the government’s intention to integrate cryptocurrencies into the mainstream financial system while mitigating risks.

 


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