Taiwan Crypto Compliance Deadline Set After MaiCoin And BitoPro Fines

Taiwan is cracking down on anti-money laundering (AML) violations in the cryptocurrency sector, with new regulations being fast-tracked for implementation. The Financial Supervisory Commission (FSC) has moved up the deadline for compliance with AML registration requirements to November 30, 2024, following fines imposed on two exchanges, MaiCoin and BitoPro, amounting to NT$1.5 million each.
The violations identified at these exchanges included issues with customer due diligence, transaction record-keeping, and the detection of suspicious transaction patterns. Both exchanges have committed to enhancing their internal controls and compliance procedures in response to the fines.
Failure to register with the government under the new rules can result in penalties of up to 5 million New Taiwan dollars or a prison sentence of up to two years for virtual asset service providers (VASPs). Despite 26 crypto providers being officially authorized to operate in Taiwan, none have completed the necessary money laundering prevention registration yet.
The FSC has stressed the importance of crypto exchanges monitoring and reporting suspicious activities, such as observing multiple accounts linked to the same IP address, frequent changes in information, and fund splitting. These regulations also mandate the implementation of quality management systems for financial audits and reporting changes in business operations to Taiwan’s Securities Over-the-counter (OTC) Trading Center within five days.
Key areas of focus under the new regulations include custody of fiat currency, information security, customer complaint handling, record-keeping, and information disclosure. VASPs must establish clear listing and delisting procedures for cryptocurrencies, as well as mechanisms to prevent market manipulation and detect abnormal trading patterns like unusual price or volume changes.