Taiwan’s Financial Supervisory Commission (FSC) announced today that the new Anti-Money Laundering (AML) regulations for virtual asset service providers will fully take effect in 2025.
The updated measures were released on October 2 by the FSC, which had earlier proposed improving the country’s crypto regulation rules. These new regulations have been in motion since March.
New Crypto Regulations in Taiwan
New rules will require that all crypto firms register with the government by September 2025; otherwise, they will face serious penalties. For noncompliance or causing the server to fail, fines of up to 5 million New Taiwan dollars ($155,900) or a two-year jail sentence could be levied.
The new regulations will replace the current system of Taiwanese VASPs starting on January 1, 2025. Those already adhering to previous AML standards must comply with the new compliance procedures and register with the government.
Companies were advised to wait until the new system was operational and submit their documents to avoid confusion caused by different regulatory requirements.
The new compliance framework also stipulates that VASPs must file annual risk assessment reports with the appropriate government agency. By the end of 2024, the FSC plans to produce a draft of its new proposal for crypto-related laws, which it expects to submit by June 2025.
Taiwan’s Push for Financial Competitiveness in the Crypto Market
The Taiwanese government is expanding its involvement in the crypto industry by introducing new Anti-Money Laundering (AML) regulations.
On September 30, the Taiwanese Financial Supervisory Commission (FSC) ventured into the digital asset ETF market domain, allowing the market for investment aimed at local professional investors.
This effort is part of more extensive efforts to create more momentum in Taiwan’s competitiveness in the financial market in a way that aligns with neighboring financial hubs such as Hong Kong and Singapore.
Chainalysis Report Highlights Movement of Illicit Crypto Funds
In its annual Crypto Crime Reports, Chainalysis released the latest findings on where illicit funds have moved over crypto wallets. It offers an in-depth analysis of how records are moved from crypto wallets.
In fact, these wallets are related to illegal activities such as crypto scams, exchange hacks, and darknet market dealings. It analyses how the funds from these wallets are counted from the initial placement stage to the layering one by conversion service.
Conversion services let you exchange cryptocurrencies for fiat currency, or other crypto, for that matter, or vice versa, of course. Some examples of this would include centralized exchanges, decentralized finance (DeFi) platforms, gambling websites, crypto mixers, and blockchain bridges.
Blockchain technology offers the transparency of this on-chain money laundering process, which is easier to track and analyze than crypto-native other financial systems.
Data shows these illicit wallets have transferred almost $100 billion to conversion services since 2019. Most funds were shifted from one entity to another in 2022 when $30 billion was moved, which was largely driven by transactions involving sanctioned entities mostly linked to the Russian-based exchange Garantex.
