Taiwan tightens anti-money laundering laws for crypto services

In a recent development, Taiwan has announced that it is tightening its anti-money laundering (AML) regulations to tackle fraud and strengthen anti-money laundering measures for virtual asset providers.

Taiwan’s Ministry of Justice has proposed amending existing law with stricter sanctions, including prison sentences of up to two years and fines of up to US$1.5 million for non-compliance.

The ‘New Four Laws to Combat Fraud

These changes, proposed by Taiwan’s Executive Yuan and known as the ‘New Four Anti-Fraud Laws’, are intended to strengthen the prevention and enforcement of fraud and money laundering. The legislation covers key aspects such as fraud crimes, money laundering, technology research and security, and communications security and surveillance.

In particular, the updated law on the prevention of money laundering imposes strict requirements on providers of virtual asset services (VASPs). New registration requirements and restrictions for currency traders have been put in place to regulate both domestic and international activities. Service providers operating without proper registration now face severe penalties.

In addition, the new regulations introduce specific categories for money laundering offenses linked to third-party payment accounts and virtual assets, with potential prison sentences of six months to five years and fines of up to Taiwan dollars 50 million.

In addition to administrative sanctions, also impose criminal penalties

Huang Mou-hsin, Taiwan’s Vice Minister of Justice, emphasized that the new legislation allows criminal penalties to be imposed on companies that violate the rules, in addition to administrative sanctions. He added that foreign cryptocurrency platforms will also be covered by the law unless they establish themselves locally and apply for AML registration.

These legal changes come hot on the heels of Taiwan’s securities regulator’s announcement that new legislation for digital assets is expected by September this year.