Taiwan Strengthens Crypto Regulations as New AML Rules Set for 2025
Taiwan is making bold moves to tighten its grip on the cryptocurrency sector by introducing stricter Anti-Money Laundering (AML) regulations. The country’s Financial Supervisory Commission (FSC) announced on October 2, 2024, that the new rules, aimed at combating illicit activities within the crypto space, will be fully enforced by 2025.
New Crypto Rules in Taiwan
As part of the new regulations, all Virtual Asset Service Providers (VASPs) must register with the government by September 2025 to avoid hefty penalties. Non-compliance will result in fines of up to 5 million New Taiwan dollars (approximately $155,900) or a potential two-year prison sentence. This represents a significant tightening of the current system, which will be replaced starting January 1, 2025.
Companies already adhering to previous AML standards will need to adjust to the new framework. The government encourages crypto firms to submit the necessary compliance documents once the new system becomes operational to prevent confusion caused by overlapping regulatory requirements.
The updated regulations also mandate that VASPs file annual risk assessment reports with the relevant government agency. A draft proposal for additional crypto-related laws is expected to be submitted by the FSC by June 2025.
A Push for Financial Competitiveness
Taiwan’s move towards stricter crypto oversight is not just about regulation—it’s part of a broader effort to remain competitive in the rapidly evolving financial landscape. By stepping up its involvement in the crypto market, Taiwan aims to position itself alongside other major financial hubs in Asia, such as Hong Kong and Singapore.
On September 30, the FSC made another significant move by entering the digital asset ETF market. This allowed investment opportunities for local professional investors and showcased Taiwan’s intent to attract more serious players in the crypto space.
Chainalysis Report Says Illicit Crypto Activity Remains a Concern
As Taiwan tightens its regulations, a report from Chainalysis sheds light on the movement of illicit crypto funds globally. The annual Crypto Crime Report reveals that since 2019, nearly $100 billion has been funneled through conversion services such as centralized exchanges, DeFi platforms, and crypto mixers. These platforms often serve as gateways for money laundering, making them a target for tighter regulations.
In 2022 alone, $30 billion was transferred, much of it involving entities linked to Russia-based exchange Garantex, which has been sanctioned for its involvement in illegal activities. Blockchain technology, however, offers transparency, making it easier to track and analyze these on-chain transactions compared to traditional financial systems.
Taiwan’s decision to tighten crypto regulations is a clear sign that the country is taking a proactive stance in maintaining financial integrity. As 2025 approaches, crypto firms operating in Taiwan will need to adapt quickly or face severe consequences. The global crypto industry, especially those with ties to Taiwan, will be watching closely as the country works to balance innovation with stringent regulatory measures.
