Taiwan Targets Crypto Service Providers with Strict AML Laws

• Taiwan has set eyes on enforcing AML laws in crypto.
• The city proposed several amendments to its existing laws to enable this crackdown.
• Offenders may face heavy fines and prison terms.

Taiwan authorities announced on Thursday intentions to punish cryptocurrency firms that fail to abide by its anti-money laundering (AML) laws.

In response to fraud and money laundering risks in the virtual asset landscape, Taiwan’s Ministry of Justice has proposed several amendments to the city’s existing AML laws, suggesting hefty fines and prison terms for non-compliant service providers.

Cracking Down on Crypto Money Laundering

Among various recommendations, the Ministry of Justice has proposed a law amendment that would require domestic and international crypto firms seeking to operate in Taiwan to register with relevant authorities for AML compliance.

Per the Ministry’s document, crypto service providers that come short of this requirement “would be criminalized” and subjected to a prison sentence of up to two years.

The document further proposed a new legal category for money laundering offenses linked to third-party payment accounts and crypto accounts on exchanges. If approved, the law will penalize offenders who use crypto to launder money with up to five years of imprisonment and fines of up to $1.5 million.

These proposed amendments must be reviewed by the Legislative Yuan, Taiwan’s national parliament, before they can be implemented.

The proposals come after local media outlets reported on March 4 that Taiwan’s Financial Supervisory Commission (FSC) had announced plans to propose a new draft for crypto regulation by September 2024.

In the meantime, crypto service providers in the city are working to set up an industry association that would help them develop self-supervisory rules under the FSC’s guidelines.

Read how Binance is following Taiwan’s AML compliance process:
Binance Initiates Taiwan’s AML Compliance Process

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