Taiwan To Enforce Strict Laws Against Virtual Asset-Tied Money Laundering

• Taiwan passes a new regulation to prevent crypto-linked frauds, as per local media.
• 25 virtual asset exchanges are already in compliance with the nation’s legal anti-money laundering (AML) standards.

The Executive Yuan, Taiwan’s executive branch, introduces a new regulation — the “New Four Laws to Combat Fraud” — to strengthen the crackdown on fraud and regulate money laundering. Virtual assets-related financial crimes are included in the amendments, as reported by local media ABMedia.

Notably, this regulation includes bills such as the Fraud Crime Harm Prevention Regulations, Money Laundering Prevention Law, Technology Investigation and Security Law, and Communications Security and Supervision Law.

As per these amendments, any virtual asset service provider (VASP) that has not completed the “money laundering prevention registration” will be subject to a 2-year prison. Moreover, crimes involving virtual asset accounts or third-party payment accounts for “special money laundering crimes” will be subject to 6 months to 5 years of prison and a fine of $1.54 million (NT$ 50 million). As per sources, 25 virtual assets exchanges are already complying with the nation’s legal anti-money laundering (AML) standards.

In September 2023, Taiwan’s regulator, the Financial Supervisory Commission, released a set of guidelines for both domestic and offshore crypto platforms. It mandated offshore exchanges or VASPs to adhere to AML compliance rules established in July 2021.

Furthermore, in October, the Legislative Yuan introduced the 30-page “Virtual Asset Management Bill,” recommending that VASPs avoid co-mingling client funds and reserve funds by setting up an internal audit system.

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