Taiwan is seeking to amend its Anti-Money Laundering (AML) regulations in order to combat fraud and strengthen AML measures for virtual asset service providers (VASPs).
The Ministry of Justice in Taiwan has put forward proposals to amend the existing AML laws, which could result in prison sentences of up to two years for noncompliant firms and fines of up to $1.5 million. These proposed amendments will now be reviewed by Taiwan’s national parliament, the Legislative Yuan.
The “New Four Laws to Combat Fraud” have been proposed by Taiwan’s Executive Yuan, with the aim of cracking down on fraud and implementing stricter regulations for money laundering prevention within the crypto service provider industry.
The amended regulations consist of four key components: the fraud crime harm prevention regulations, the money laundering prevention law, the technology investigation and security law, and the communications security and supervision law.
One significant change is the introduction of a new money laundering prevention law specifically targeting virtual asset service providers. Noncompliant VASPs will face harsher penalties under this law.
The law has undergone three distinct modifications, which include revised registration requirements and restrictions for both domestic and international currency dealers.
Under the newly amended laws, VASPs run the risk of imprisonment if they offer services without registering with the relevant authority.
A new legal category has also been established for money laundering offenses related to third-party payment accounts and virtual asset accounts.
Using third-party accounts for money laundering can now result in jail terms ranging from six months to five years, as well as fines of up to 50 million New Taiwan dollars ($1.5 million).
Huang Mou-hsin, Taiwan’s Deputy Minister of Justice, explained that the current provisions only allow authorities to impose administrative penalties on noncompliant cryptocurrency companies. However, the proposed law seeks to criminalize such behavior with substantial fines and prison time.
If the proposed law is enacted, foreign cryptocurrency platforms will face criminal penalties unless they establish local firms and obtain AML registration.
This latest proposal comes after the country’s securities regulator announced plans to propose new laws for digital assets by September.