Taiwan has accelerated the introduction of its anti-money laundering (AML) regulatory framework for crypto businesses. The new regulations, which are expected to take effect almost a month in advance, require virtual asset service providers (VASPs) to comply with the registration mandate in order to avoid stricter penalties.
Taiwan accelerates its new anti-money laundering mandate
Taiwan’s Financial Supervisory Commission (FSC) recently announced that it will advance the implementation of its AML cryptocurrency registration regulations from January 1, 2025 to November 30, 2024.
The AML overhaul, announced in October, will introduce stricter AML guidelines for VASPs and require all crypto companies to complete AML registration with the Taiwan government by September 2025.
Companies that fail to register will not be allowed to offer services in the country and could be sentenced to two years in prison or fines of up to NTD 5 million, worth ‘around $155,000.
Under the new regulations, the listing and delisting of digital assets will be closely monitored, and crypto companies are expected to establish measures against illicit trading and report suspicious activity related to trading volume and price developments.
Additionally, FSC requires registered crypto service providers to prepare an annual risk assessment report and detail customer assets. The regulator has mandated digital asset custodians to hold customer assets in trust or separate them from platform assets.
To register, businesses must submit a form describing their business nature. Any changes to the information provided in this form must be updated within five business days with the Over-the-Counter (OTC) Securities Trading Center.
The new regulatory framework will replace Taiwan’s current system for VASPs. Companies that followed the previous AML regulations must comply with the new system and complete the registration process.
After the announcement, the FSC fined two local exchanges, MaiCoin and BitoPro, for violating AML guidelines related to customer due diligence (CDD), transaction monitoring, recordkeeping and reporting suspicious transactions.
More Crypto-Related Laws Coming
This year, Taiwan has worked to update its regulatory framework to implement crypto-related laws that expand on its seemingly cautious but friendly approach. The country’s Finance Ministry recently announced that it would work on a framework to combat crypto tax evasion.
As Bitcoinist reports, Finance Minister Chuang Tsui-yun and Tax Administration Director-General Sung Hsiu-ling have pledged to review current regulations over the next three months to “better enable the government to tax cryptocurrency gains.”
The finance minister admitted that the country did not have a system in place to effectively collect taxes related to digital assets from individuals, despite policies to collect corporate taxes and corporate taxes from of the 26 crypto exchanges that have completed AML registration.
Legal experts noted that financial authorities may struggle to resolve this issue with current tax laws because investors can escape scrutiny “by disguising transactions as overseas activities conducted in U.S. dollars.” As a result, Taiwanese regulators need to amend these regulations to combat crypto tax evasion.
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