Taiwan is taking swift action to combat money laundering in the cryptocurrency sector by advancing its new AML regulations. The Financial Supervisory Commission (FSC) has moved up the deadline for crypto exchanges to register for compliance from January 1, 2025, to November 30, 2024.
This step comes after recent violations by two crypto exchanges, MaiCoin and BitoPro, which were fined for lapses in customer due diligence and transaction monitoring.
The updated regulations require all virtual asset service providers (VASPs), whether previously registered or not, to comply with Taiwan’s new AML rules. The FSC’s decision to expedite these measures follows reports of suspicious activities, including issues with transaction tracking and reporting.
Key Points of the New Regulations:
Mandatory AML Registration: All crypto exchanges and service providers must register for money laundering prevention by November 30, 2024. Non-compliance could lead to severe penalties, including fines of up to NT$5 million ($155,900) or even two years in prison.
Expanded Requirements: The new rules apply to both previously registered and new crypto businesses. This means all 26 crypto service providers currently approved in Taiwan will need to comply with the updated framework.
Enhanced Monitoring: Crypto exchanges are required to monitor for suspicious activities such as unusual transaction patterns, splitting of funds, multiple accounts linked to the same IP address, and frequent changes in user information.
Additionally, the FSC has also issued a detailed checklist to help businesses identify red flags. The new regulation also highlights that crypto exchanges must closely track customer details, including names, bank account numbers, IP locations, and account activity patterns, to detect potential fraud.
Crypto companies operating from abroad must establish a local presence in Taiwan and complete the AML registration process under Taiwan’s Company Law.
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