Taiwan is seeking to revise its Anti-Money Laundering (AML) regulations in order to address fraud and enhance AML measures for virtual asset service providers (VASPs).
The Ministry of Justice in Taiwan has put forth proposed amendments to the existing AML laws, which could result in jail terms of up to two years for non-compliant companies and fines of up to $1.5 million. These proposed amendments will be submitted to Taiwan’s national parliament, the Legislative Yuan, for review.
The “New Four Laws to Combat Fraud” was introduced by Taiwan’s Executive Yuan, with the aim of strengthening efforts to combat fraud and implementing stricter regulations for preventing money laundering in the crypto service industry.
The amended regulations consist of four key components: fraud crime harm prevention regulations, money laundering prevention law, technology investigation and security law, and communications security and supervision law.
The most significant change comes from the new money laundering prevention law targeting virtual asset service providers. VASPs that violate this law will face more severe penalties for non-compliance.
Three specific modifications have been made to the law, which include revised registration requirements and restrictions for domestic and international currency dealers.
According to the revised laws, VASPs run the risk of imprisonment if they offer services without registering with the relevant authority.
Additionally, a new legal category has been introduced to address money laundering offenses related to third-party payment accounts and virtual asset accounts.
In relation to this, utilizing third-party accounts for money laundering could result in jail terms ranging from six months to five years and fines of up to 50 million New Taiwan dollars ($1.5 million).
Huang Mou-hsin, Taiwan’s Deputy Minister of Justice, stated that under the current provisions, authorities can only impose administrative penalties on non-compliant cryptocurrency companies. However, the proposed new law would criminalize such behavior, imposing substantial fines and prison sentences.
The proposed law would also require foreign cryptocurrency platforms to face criminal penalties unless they establish local companies and seek AML registration.
This latest proposal comes a few months after the country’s securities regulator announced its plans to introduce new laws for digital assets by September.