The Financial Supervisory Commission has developed a new anti-money laundering regulation in response to the legal amendments enacted in July. The new rules will take effect on January 1st, 2025, and require “Money Laundering Prevention and Registration Measures for Enterprises or Personnel Providing Virtual Asset Services” to complete their AML registrations by September 30th, 2025.
Failing to comply would result in jail time for up to two years. On Wednesday, the FSC said that it prepared rules in regard to VASPs in a statement and specified that VASPs should comply with anti-money laundering laws as defined under the FSC’s rules introduced three years back.
The new rules, which are expected to replace those introduced by the FSC in July 2021, require VASPs to comply with AML laws. In its statement on Monday, the FSC also said all providers must comply with the new streamlined registration procedures for VASPs regardless of whether or not they have already completed a compliance declaration.
Kevin Cheng, the crypto lawyer and secretary general at the Taiwan Fintech Association, told the media outlet The Block that operators would face criminal charges if they failed to comply with this Act. In contrast, compliant operators now have more regulatory burden. “The entire industry environment will gradually move towards the model of licensed financial institutions,” Cheng pointed out.
Cheng also said that the new regulations require compliance with AML in addition to a certain number of qualifications set by management and corporate obligations, such as transaction security, consumer asset protection, and information security.
However, these rules create a more significant regulatory threshold for industry participants to meet both the initial entry and ongoing operation. Cheng continued, “The new regulations provide stronger legal protection for the development of Taiwan’s [crypto] industry, making it more attractive for large investors accustomed to traditional finance to participate.”
On the other hand, the FSC is also thought to be considering a draft special law pertaining to crypto assets that it would submit to the Executive Yuan, an executive body of the Republic of China (Taiwan), in June. The FSC aims to finalize the draft proposal by the end of 2024.
Read more on Japan’s FSA’s similar announcement.