Taiwan’s FSC unveils new AML regulations for virtual asset providers

Taiwan’s Financial Supervisory Commission (FSC) unveiled updated anti-money laundering (AML) regulations on 2 October. The main objective is to enhance the supervision of local virtual asset service providers (VASPs).

Entities that do not comply, on the other hand, will be heavily penalized. The revised regulations will replace the existing AML framework.

Updated AML regulations aim to strengthen crypto oversight

According to the official press release, these new measures, starting January 1, 2025, require all crypto companies to register with the Taiwanese government by September 2025.

Strict penalties will be imposed for non-compliance, including up to two years in prison or fines of 5 million New Taiwan dollars (approximately $155,900).

Taiwan implemented its previous set of cryptocurrency money laundering regulations in July 2021. However, with the recent announcement, even companies that are already fully compliant will need to re-register with the FSC to avoid penalties.

The regulator has been preparing for these changes since March, highlighting the need for VASPs to submit an annual risk assessment report to the relevant authorities.

In addition, the Commission has advised VASPs to postpone the submission of documents until the new registration system is in place to avoid the complications of reapplying under the updated regulations.

As part of Taiwan’s comprehensive strategy to improve its regulatory framework for digital assets, the FSC plans to propose new crypto-related laws in June 2025, with a draft expected by the end of 2024, ensuring that the local crypto landscape remains secure and compliant.

FSC Greenlights ETFs for professional investors

Despite the new AML laws, Taiwan also appears to be relaxing its cryptocurrency regulations in certain areas while maintaining a cautious stance on market risks. Last month, the FSC officially allowed professional investors to engage with exchange-traded funds (ETFs) associated with “foreign virtual assets”.

The FSC recognized the high investment risks associated with foreign virtual asset ETFs and recommended that only professional investors, such as institutional investors, high net worth clients and qualified individuals, be allowed to participate.

Key provisions include the establishment of a suitability assessment system for these products, mandatory risk warning letters for non-institutional customers prior to their initial purchases and the provision of detailed product information. In addition, securities firms must conduct regular education and training for their staff on virtual assets to ensure a thorough understanding.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!