- Taiwan enforces AML rules for VASPs, mandating strict registration by November 30.
- New AML measures aim to curb illicit crypto activities and enhance market transparency.
- Non-compliance with Taiwan’s AML laws risks criminal charges and up to two years’ jail.
Taiwan has implemented stringent anti-money laundering (AML) regulations for virtual asset service providers (VASPs), effective November 30, 2024. This change builds on Article 6 of the Money Laundering Prevention Law, which was initially enacted in 2013, and demonstrates Taiwan’s increased focus on the cryptocurrency sector.
The rules require all VASPs operating within Taiwan, including those established overseas, to complete AML registration with the central industry authority. Non-compliant companies may face severe penalties, including criminal charges and potential imprisonment for up to two years.
Mandatory Registration and Operational Restrictions
Enterprises or individuals offering virtual asset services in Taiwan must now follow the newly established VASP Registration Measures. These measures outline the registration process and the required documentation for compliance.
Furthermore, companies or overseas personnel must establish a local entity or branch in Taiwan under the Company Law before providing services. This regulation aims to curb unregulated crypto activities and ensure transparency within the market. Unregistered entities cannot offer virtual asset services in the country.
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In addition to registration requirements, the VASP Money Laundering Measures enforce stringent protocols to monitor and mitigate risks from illicit financial activities. These include identifying and preventing suspected transactions linked to money laundering, terrorism financing, or military expansion. Enterprises must create robust internal systems to detect and report suspicious transactions promptly.
Comprehensive Guidelines for Compliance
Taiwan’s regulatory framework for VASPs also includes guiding principles to streamline operations and enhance compliance. These principles emphasize the importance of monitoring financial activity, maintaining accurate records, and adhering to international AML standards. Taiwan has published examples of transactions that are flagged for potential money laundering or terrorism financing to assist operators in recognizing and addressing high-risk activities.
Additionally, detailed instructions on AML registration methods are available to guide enterprises through the compliance process. Despite these efforts, no operators have completed AML registration under the updated VASP regulations, highlighting the urgency for compliance within the industry.
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