Taiwan is taking a firm stance on cryptocurrency service providers who evade regulations, implementing strict penalties to signal a zero-tolerance policy towards non-compliance in the crypto industry. The new legislative sweep aims to strengthen the country’s financial sector by combating money laundering and fraud.
The forefront of Taiwan’s regulatory overhaul is the requirement for all virtual asset service providers to register for money laundering prevention. Failure to comply could result in a two-year prison sentence for company executives. This mandate is part of the “New Four Laws to Combat Fraud,” which includes regulations to prevent fraud crimes, money laundering, technology investigation, and communication security. These laws enhance the government’s ability to address and prevent various criminal activities, with a particular focus on crypto transactions.
The revisions specifically target loopholes that were previously exploited in the crypto market. One significant update is the introduction of new, specialized money laundering crimes. For example, using virtual asset accounts and third-party payment accounts for money laundering activities now carries a potential prison sentence ranging from six months to five years. Offenders may also face fines of up to NT$50 million.
Another crucial aspect of the regulatory update is the increased scrutiny over both domestic and foreign currency dealers. Under the revised Money Laundering Prevention Law, not only local currency dealers but also foreign currency dealers seeking to operate in Taiwan must establish branches or complete proper company registration locally. This step aims to ensure transparency and compliance in virtual asset transactions conducted within and across Taiwan’s borders.
Qiu Shuzhen, the deputy chairman of the Financial Supervisory Commission, emphasizes the Commission’s role as a strict overseer in this evolving sector. The focus is not only on inspecting currency dealers’ investment and payment flows but also on strengthening their internal management and control systems. The integration of accountants into these processes aims to enhance transparency and adherence to the law.
To date, 25 virtual currency exchanges have taken steps to align with legal standards and complete compliance statements for money laundering prevention. This indicates a growing recognition within the industry of the serious consequences of non-compliance under Taiwan’s stricter legal framework.
Through the implementation of these robust laws, the Taiwanese government demonstrates its determination to combat financial crime and secure the financial market. The expectation is that as these laws are progressively enforced, they will effectively deter money laundering and fraud, creating a safer and more stable environment for legitimate virtual asset operations.
