Taiwan is taking strong action against cryptocurrency service providers who evade regulations, with the introduction of strict penalties to enforce a zero-tolerance policy on non-compliance in the crypto sector. These new rules aim to strengthen Taiwan’s financial sector against money laundering and fraud.
One of the key aspects of Taiwan’s regulatory overhaul is the requirement for all virtual asset service providers to register for money laundering prevention. Failure to comply with this mandate could result in company executives facing up to two years in prison.
This requirement is part of a broader legislative initiative called the “New Four Laws to Combat Fraud,” which includes regulations to prevent fraud crimes, money laundering, technology investigation and security, and communications security and supervision. Together, these laws give the government more tools to tackle and prevent various criminal activities, with a particular focus on crypto transactions.
The revisions specifically target loopholes that have been exploited in the crypto market. One significant update is the categorization of new, specialized money laundering crimes. For example, using virtual asset accounts and third-party payment accounts for money laundering can now lead to prison sentences ranging from six months to five years. Offenders may also face fines of up to NT$50 million.
Another important aspect of the regulatory update is the increased scrutiny of 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 is to ensure greater transparency and compliance with the law 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.
So far, 25 virtual currency exchanges have taken steps to comply with legal standards and complete compliance statements related to money laundering prevention. This indicates that the industry is increasingly recognizing the serious consequences of non-compliance within Taiwan’s tightening legal framework.
By implementing these robust laws, the Taiwanese government is demonstrating its commitment to combating financial crime and securing the financial market. It is expected that as these laws are progressively enforced, they will effectively deter money laundering and fraud, creating a safer and more stable market environment for legitimate virtual asset operations.
