Taiwan is seeking to revise its Anti-Money Laundering (AML) regulations in order to address fraud and implement AML measures for virtual asset service providers (VASPs).
The Ministry of Justice in Taiwan has put forward amendments to the existing AML laws, which could result in noncompliant firms facing jail terms of up to two years and fines of up to $1.5 million. These proposed amendments will be reviewed by Taiwan’s national parliament, the Legislative Yuan.
The Executive Yuan of Taiwan has introduced the “New Four Laws to Combat Fraud” as a proposal. The objective of these amendments is to strengthen efforts to combat fraud and establish strict regulations for preventing money laundering in the crypto service provider 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 is the introduction of a new money laundering prevention law specifically targeting virtual asset service providers. VASPs that fail to comply with this law will face more severe penalties.
There have been three specific modifications made to the law, which involve 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.
Additionally, a new legal category has been introduced for money laundering offenses associated with third-party payment accounts and virtual asset accounts.
In relation to this, the penalties for using third-party accounts for money laundering could result in prison sentences 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, has stated that under the current provisions, authorities can only impose administrative penalties on noncompliant cryptocurrency companies. However, the proposed law aims to criminalize such behavior by imposing substantial fines and prison sentences.
Furthermore, the proposed law would require foreign cryptocurrency platforms to face criminal penalties unless they establish local firms and undergo AML registration.
These latest proposals come a few months after the country’s securities regulator announced its intention to propose new laws for digital assets by September.