Taiwan’s new cryptocurrency regulations aim to strengthen AML compliance for virtual asset providers.
Taiwan’s Financial Supervisory Commission (FSC) has introduced new regulations to strengthen anti-money laundering (AML) controls for virtual asset service providers (VASPs). The updated regulations, which are scheduled to take effect in January 2025, mark significant changes to the way Taiwan regulates its growing cryptocurrency industry. Taiwan’s new cryptocurrency regulations aim to strengthen AML compliance for virtual asset providers. Companies must register with the government and face severe penalties if they do not meet stricter compliance standards.
Overview of Taiwan’s new cryptocurrency regulations
The new regulations announced by Taiwan’s FSC respond to the rapid growth of the digital asset market. Starting January 2025, all cryptocurrency-related businesses in Taiwan must register with the government by September 2025. Organizations that fail to comply could be fined up to NT$5 million (about $155,900) or jailed for up to two years. years.
The FSC has emphasized strengthening the country’s AML framework to bring it in line with international standards. Taiwan has had AML measures in place since 2021, but Taiwan’s new cryptocurrency regulations aim to strengthen AML compliance for virtual asset providers by updating regulations to close gaps and strengthen oversight of cryptocurrency businesses.
Major changes to virtual asset service providers (VASPs)
New regulations require VASPs in Taiwan to adhere to stricter compliance rules. Companies that previously complied with the existing framework will need to re-register with the FSC. This move reflects the FSC’s intention to foster greater levels of transparency across the industry.
The FSC has also recommended that VASPs submit an annual risk assessment as part of their compliance obligations. Taiwan’s new cryptocurrency regulations aim to strengthen AML compliance for virtual asset providers. The FSC recommends that businesses wait for the official registration system before submitting their documents to avoid re-application issues under the updated regulations.
Future Outlook: Taiwan’s Broad Cryptocurrency Strategy
The new cryptocurrency regulations are part of Taiwan’s larger plan to strengthen its digital asset regulatory framework. The FSC plans to propose additional cryptocurrency legislation by mid-2025, with a draft expected by the end of 2024. These new laws aim to further ensure the security and transparency of Taiwan’s growing cryptocurrency market.
Despite more stringent AML measures, Taiwan’s FSC has also shown some flexibility in other areas of cryptocurrency regulation. For example, professional investors in Taiwan can now participate in exchange-traded funds (ETFs) linked to virtual assets, opening up new investment opportunities for institutions and high-net-worth individuals.
FSC’s move to approve virtual asset ETF
Recently, the Financial Services Commission approved the use of virtual asset ETFs for professional investors. Although these financial products involve higher risks, regulators have limited their offerings to institutional investors, qualified individuals, and high net worth clients.
The FSC has implemented a number of provisions to protect investors, including suitability assessments and mandatory risk warnings for non-institutional clients. These steps ensure that only knowledgeable and prepared investors participate in high-risk products.
Conclusion: Evolution of Taiwan’s Cryptocurrency Regulation
Taiwan’s new cryptocurrency regulations aim to strengthen AML compliance for virtual asset providers. Taiwan’s new cryptocurrency regulations are an important step in efforts to regulate digital assets more effectively. As the island strengthens its AML framework for VASPs, it continues to develop a balanced approach to cryptocurrency regulation to ensure compliance and innovation. FSC’s upcoming offering will help shape the future of Taiwan’s cryptocurrency landscape, positioning it as a leader in Asia’s evolving digital finance sector.