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Taiwan proposes anti-money laundering changes, calls for jail and financial penalties

The proposals aim to make crypto service providers more accountable for complying with anti-money laundering regulations.

Date: 2024-05-10 Author: Marek Stiller
Taiwan proposes anti-money laundering changes, calls for jail and financial penalties

Taiwanese authorities announced Thursday that they intend to penalize cryptocurrency companies that fail to comply with anti-money laundering (AML) regulations .

In response to the risk of fraud and money laundering in the virtual asset environment, Taiwan’s Ministry of Justice has proposed several amendments to existing AML regulations, suggesting hefty fines and prison terms for service providers that fail to comply.

The Justice Ministry has introduced amendments that would require domestic and foreign companies operating in Taiwan to register to ensure compliance with AML regulations. Failure to comply can result in imprisonment of up to two years and fines of up to $1.5 million.

Key elements of the proposed changes include regulations on fraud prevention, money laundering, technology research, and communications security and supervision.

It is noteworthy that a major change in the new anti-money laundering law targeting VASPs provides for harsher penalties for non-compliance. The revised law introduces stricter registration requirements and restrictions for domestic and international currency dealers.

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Under the proposed VASP changes, companies risk imprisonment if they provide services without proper registration. In addition, a new legal category has been introduced for money laundering offenses related to third-party payment accounts and virtual asset accounts.

Under the draft, foreign crypto platforms must establish local entities and apply for AML registration to avoid criminal penalties.

Additionally, the proposed changes will cover cryptocurrency under existing AML regulations. Criminals using cryptocurrency to launder money could face prison terms of six months to five years and fines of up to 50 million Taiwan dollars ($1.5 million).

TheLegislative Yuan, Taiwan’s national parliament, will soon review the proposed amendments.

Deputy Minister of Justice Huang Mou-hsin stressed that while current laws allow administrative penalties to be imposed on non-compliant companies, the proposed amendments would elevate such violations to a crime, which could result in imprisonment.

Taiwan takes steps toward cryptocurrency regulation and industry self-regulation

Taiwan introduced anti-money laundering regulations for cryptocurrency service providers in July 2021 under the Financial Supervisory Commission. However, the industry mostly operates without extensive regulation.

The latest proposal follows a March 4 announcement that Taiwan’s Financial Supervisory Commission (FSC) has announced plans to introduce new regulations for digital assets by September 2024.

In parallel, Taiwan’s cryptocurrency industry is moving toward forming an industry association, with the Ministry of Interior approving its proposal in March.

Launched on September 26, 2023, the formation of the association will foster cooperation with regulators. The deadline for its formation is the end of June. Key players such as BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex and Shangbito have joined forces to strengthen the cryptocurrency industry and enhance cooperation with regulators.

Then on November 9, 2023. The Financial Supervisory Commission (FSC) granted Cathay Securities its inaugural license to offer security tokens in Taiwan. This landmark authorization authorized Cathay Securities to issue $930,000 worth of tokenized green bonds every six months.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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