Taiwan has accelerated the introduction of its anti-money laundering (AML) regulatory framework for crypto companies. The new regulations, which take effect almost a month in advance, require Virtual Asset Service Providers (VASPs) to comply with the registration mandate to avoid harsher penalties.
Taiwan accelerates new AML mandate
The Taiwanese Financial Supervisory Commission (FSC) recently announced this announced it would promote the implementation of its crypto AML registration regulation 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 Taiwanese government by September 2025.
The companies that do not register will not be allowed to offer services in the country and could face a prison sentence of two years or fines of up to NTD5 million, worth approximately $155,000.
Under the new regulations, the listing and delisting of digital assets will be closely monitored, and crypto companies are expected to take action against illegal trading and report any suspicious activity related to trading volume and price movements.
In addition, FSC requires registered crypto service providers to prepare an annual risk assessment report and describe clients’ assets. The regulator has ordered digital asset managers to hold customers’ assets in trust or segregate them from the platform’s assets.
To register, companies must submit a form describing their business nature. Any changes to the information on this form must be updated with the Securities Over-the-counter (OTC) Trading Center within five business days.
The new regulatory framework will replace Taiwan’s current system for VASPs. Companies that have complied with 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 regarding customer due diligence (CDD), transaction monitoring, record keeping and suspicious transaction reporting.
More crypto-related laws are coming
This year, Taiwan has been working to update its regulatory framework to implement crypto-related laws that build on its seemingly cautious but friendly approach. The country’s Ministry of Finance recently announced that it would be working on a framework to tackle crypto tax evasion.
If reported By Bitcoinist, Finance Minister Chuang Tsui-yun and Internal Revenue Service Director General Sung Hsiu-ling pledged to revise current regulations within the next three months to “enhance the government’s ability to tax cryptocurrency profits.”
The finance minister admitted that the country had not implemented a system that effectively collects digital wealth-related taxes from individuals, despite having policies in place to collect business and corporate taxes from the 26 crypto exchanges that have completed AML registration.
Legal experts noted that with current challenges, financial authorities may face challenges in tackling this issue tax laws because investors can avoid scrutiny “by disguising the transactions as foreign activities in U.S. dollars.” As a result, Taiwanese regulators must adjust these regulations to tackle crypto tax evasion.
Bitcoin (BTC) is trading at $96,962 in the one-week chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com