Taiwan’s Financial Supervisory Commission (FSC) has announced new Anti-Money Laundering (AML) regulations for virtual asset service providers (VASPs), which will come into full effect in 2025. This move aims to strengthen the country’s oversight of the crypto sector and align it with global standards.
Key Features of the New Regulations
Under the updated framework, all crypto firms must register with the government by September 2025 or face severe penalties. Noncompliance could result in fines of up to 5 million New Taiwan dollars (approximately £155,900) or a two-year prison sentence. The new regulations will replace the current AML system for VASPs starting January 1, 2025. Companies adhering to existing standards must comply with the new requirements and register accordingly.
The FSC has advised firms to wait until the new system is operational before submitting their documents to prevent confusion arising from differing regulatory requirements. Additionally, VASPs will be required to file annual risk assessment reports with the relevant government agency.
Taiwan’s Competitive Push in the Crypto Market
In conjunction with the new AML measures, the Taiwanese government is also looking to enhance its standing in the global crypto landscape. On September 30, the FSC entered the digital asset ETF market, allowing local professional investors access to new investment opportunities. This initiative is part of Taiwan’s broader strategy to boost its financial competitiveness, aiming to align itself with financial hubs like Hong Kong and Singapore.
Chainalysis Report on Illegal Crypto Activity
A recent report by Chainalysis highlighted the movement of illegal funds through crypto wallets. The report indicates that nearly $100 billion has been transferred to conversion services since 2019, with a significant surge in transactions occurring in 2022. Many of these transfers are linked to illegal activities, including scams and exchange hacks, underscoring the importance of Taiwan’s enhanced regulatory measures.
As Taiwan implements these new regulations, the country aims to ensure a safer and more compliant environment for its growing crypto industry.
