Taiwan to Implement Strict Crypto AML Rules on November 30

Taiwan’s Financial Supervisory Commission (FSC) will enforce new anti-money laundering (AML) regulations for cryptocurrency service providers starting November 30.

The upcoming rules require crypto exchanges and other virtual asset service providers (VASPs) to register for AML compliance.

AML Framework

The deadline for mandatory AML registration for crypto companies was initially January 1, 2025, but the FSC has pushed it forward by a month.

In a November 28 statement, the regulator said that overseas entities offering virtual asset services in Taiwan must establish a local presence and complete the AML registration process under the Company Law. Currently, 26 crypto providers are approved to operate in the country, but all of them, registered or not, must comply with the updated AML requirements.

To assist with compliance, the FSC issued a checklist to help the platforms identify suspicious activities. They were instructed to monitor customer details such as names, bank account information, IP locations, and account usage patterns.

Additionally, they also have to look for unusual transaction activities, including frequent changes to account information, splitting funds, and using multiple accounts from the same IP address.

Non-compliance could result in severe penalties, including fines of up to NT$5 million ($153,700) and imprisonment for as long as two years.

This regulatory push follows the FSC’s decision to penalize two local exchanges, MaiCoin and BitoPro, for multiple violations. On Monday, the exchanges were fined NT$1.5 million each for non-compliance with AML regulations.

According to the agency, the crypto firms did not improve customer due diligence, lacked sufficient knowledge of customers’ wealth sources, failed to keep adequate transaction records, and were ineffective in identifying suspicious transaction patterns.

A Balanced Approach

Taiwan has been actively advancing cryptocurrency regulations as part of its strategy to position itself as a global leader in the digital asset space. In September of last year, the FSC introduced ten guiding principles for VASPs to create self-regulatory frameworks.

According to local media reports, these principles are designed to enhance transparency through improved information disclosure, establish clear standards for the listing and delisting of virtual assets, and ensure the proper separation and custody of client and company funds.

More recently, it revealed plans to introduce a registration system requiring cryptocurrency exchanges to register with the Taiwanese government by September 2025.

While the government has tightened its oversight, it is also introducing measures to encourage growth in the sector. Last month, the Financial watchdog granted professional investors access to exchange-traded funds (ETFs) linked to foreign digital assets.

Additionally, the regulator is preparing a pilot program for institutional cryptocurrency custody, with applications set to open in early 2025. Three private banks have already expressed interest in participating in the initiative.