In a significant move aimed at bolstering financial integrity within its burgeoning cryptocurrency sector, Taiwan’s Legislative Yuan has approved amendments to its anti-money laundering (AML) laws. The revised legislation mandates that all cryptocurrency firms operating within Taiwan comply with stringent AML protocols and register their operational capacities. Non-compliance could lead to imprisonment for up to two years or fines reaching NT$5 million ($153,800).
The amendments, passed following a third reading late Tuesday, underscore Taiwan’s commitment to regulating cryptocurrency activities more rigorously. Overseas crypto platforms seeking to operate in Taiwan must establish local entities and adhere to local AML regulations to avoid facing criminal penalties under the new rules.
Taiwan’s Financial Supervisory Commission (FSC) had earlier introduced preliminary AML rules in July 2021, marking the initial steps towards regulation in a previously unregulated sector. Deputy Minister of Justice Huang Mou-hsin highlighted the limitations of existing enforcement capabilities, noting that until now, authorities could only impose administrative penalties on non-compliant firms.
Kevin Cheng, a crypto law expert and secretary general of the Taiwan Fintech Association, commented on the potential challenges ahead for businesses yet to complete their AML declarations under the new regime. “They will face uncertainty regarding the finalization of review standards, potentially leading to prolonged waiting periods and the need to restart compliance efforts once registration standards are clarified,” Cheng remarked.
Cheng also noted that firms already compliant with AML regulations will face heightened scrutiny moving forward, despite being allowed to continue operations temporarily.
In parallel with legislative amendments, the FSC is deliberating a special law proposal for crypto assets, scheduled for submission to the Executive Yuan in June 2025. This initiative aims to further enhance regulatory frameworks in alignment with evolving industry dynamics.
The recent establishment of a local industry association by the crypto sector marks a proactive step towards self-regulation, formulated under government guidelines. This collaborative effort seeks to complement governmental oversight and foster a compliant and transparent cryptocurrency environment in Taiwan.
