November 5, 2024
By Joe Pan
Taiwan became the first country in Asia to enact specific anti-money laundering laws (AML) in 1996. It also became a founding member of the Asia-Pacific Group on Money Laundering (“APG”)
With the advent of cryptocurrency and payment adoption, Asian countries have been tightening regulations around digital assets. Taiwan has followed suit, passing bills to focus on anti-money laundering (AML) measures in the crypto sector. As we mark the passing of 100 days since the enactment of Taiwan’s latest AML regulations, we review its impact, particularly on domestic and foreign virtual asset service providers (VASPs) operating in the jurisdiction.
Key takeaways:
New registration requirements for crypto dealers
The new law passed on July 16 mandates that all VASPs, including overseas companies, must register with Taiwan’s Financial Supervisory Commission (FSC) by September 30, 2025. This requirement applies to both existing operators and new entrants to the market. Companies already compliant with previous AML standards must re-register under the new system within three months of the law’s effective date, which is January 1, 2025.
For foreign VASPs, the law stipulates that they must establish a local presence by registering a company or branch office in Taiwan in accordance with the Company Act. This move aims to ensure that overseas operators are subject to the same regulatory oversight as domestic firms.
Defining “virtual asset services”
The new regulations broadly define “virtual asset services” to encompass a wide range of crypto-related activities. These include:
- Exchanges between virtual currencies and fiat currencies (including TWD, foreign currencies, and currencies from mainland China, Hong Kong, or Macao)
- Exchanges between different virtual currencies
- Transfer of virtual currencies
- Custody or administration of virtual currencies
- Financial services related to the issuance or sale of virtual currencies
This comprehensive definition ensures that most crypto-related businesses fall under the regulatory purview, leaving little room for ambiguity or loopholes.
Penalties for failing to complete money laundering prevention training
The new law imposes strict penalties for non-compliance, particularly regarding AML training and procedures. VASPs that fail to implement proper AML measures, including staff training, face severe consequences:
- Fines of up to NT$5 million (approximately US$156,000)
- Imprisonment for up to two years
- Potential revocation of business licenses
These penalties apply to both individuals and corporate entities, with juristic persons also subject to criminal fines if found in violation.
As Jason Hsu, Senior Research Fellow at Harvard Kennedy School and former Taiwanese legislator , noted, “The new AML regulations for virtual asset service providers represent a positive step forward for Taiwan’s crypto ecosystem. By implementing clear guidelines and registration requirements, Taiwan is creating a more secure and transparent environment for blockchain innovation.”
While the enactment of these regulations marks a significant shift in Taiwan’s approach to crypto regulation, Taiwan-based Alice Tsai, Founder and CEO of Ambassadors Capital, expressed a cautious optimism: “While the new regulations add compliance burdens for crypto businesses, they also provide much-needed regulatory clarity. We’re cautiously optimistic that this framework will help Taiwan attract reputable overseas operators, which would benefit the entire ecosystem.”
As the 100-day mark passes, it is clear that while challenges remain for both domestic and foreign VASPs in navigating these new requirements, Taiwan’s proactive approach positions it as a competitive player in the evolving landscape of cryptocurrency regulation in Asia.
These regulations reflect the Taiwanese government’s efforts to strengthen virtual asset supervision and anti-money laundering measures. In particular, the amendment to the Money Laundering Prevention Act imposes stricter requirements on Virtual Asset Service Providers (VASPs), including the need to establish a company or branch in Taiwan and complete anti-money laundering registration before providing services. The latest amendment in July 2024 further expands the scope, requiring all virtual asset service providers and third-party payment services to complete anti-money laundering prevention, service capability registration or login, or face penalties of up to 2 years imprisonment or a fine of up to 5 million New Taiwan dollars.
AML crypto-related legislation gone through the ROC Legislative Yuan and Financial Supervisory Commission in the last three years:
| Legislation Name | Proposed | Passed | Effective |
| Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises of Virtual Currency Platforms and Trading Business | 06/23/2021 | 06/23/2021 | 07/02/2021 |
| Amendment to Money Laundering Control Act | 03/17/2023 | 05/26/2023 | 07/1/2024 |
| Guidelines for Virtual Asset Service Providers | 09/01/2023 | 09/01/2023 | 09/01/2023 |
| Expanded AML Crypto-Related Amendment | 06/03/2024 | 07/16/2024 | 01/01/2025 |
For complete wordings of the July 16 AML legislation in Chinese
About the Author
Joe Pan (https://www.linkedin.com/in/joepanimpactnews/) is an editor at Blockwind News and an early adopter of blockchain technology. He has covered major crypto conferences globally since 2019 and frequently moderates Web3 events across Asia. Joe is part of the founding team of NFTMetta and Blockwind News.
