- Taiwan has its sights set on enforcing strengthened regulations for its local crypto industry.
- The country is establishing a self-regulating industry association.
- Taiwan has recently proposed refined amendments to its existing anti-money laundering guidelines.
Local crypto industries across the APAC are gaining momentum as authorities seek to transform their regions into digital hubs while ensuring a regulated environment. Among these pioneers, Taiwan has emerged as a proactive player, taking substantial steps to regulate the crypto asset class with a progressive outlook.
In a move to further its aspirations, Taiwan has unveiled a designated association to enhance its regulatory framework.
Taiwan’s Crypto Association
According to local reports on Thursday, June 13, 2024, the local Taiwan crypto industry has established an industry association as part of ongoing efforts to ensure regulations.
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The newly formed ‘Taiwan Virtual Asset Service Provider Association’, which will comprise 24 licensed service providers, will establish self-supervisory rules under the government’s guidance, promoting operational oversight and asset class regulation.
Taiwan’s new regulatory association is expected to submit draft laws to the government by year-end. These laws are targeted at balancing industry interests, meeting governmental expectations, and safeguarding consumer rights.
The association will be led by two executives, including Titan Cheng, the CEO of Taiwan-based crypto exchange BitoPro, as Chair. Winston Hsiao, the co-founder of XREX, will serve as Vice Chair.
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The new industry formation follows Taiwan’s recent unveiling of new regulatory guidelines targeting financial crimes.
Taiwan Enforces AML Laws
On May 9, 2024, the Taiwan Ministry of Justice proposed refined amendments to existing anti-money laundering (AML) laws within the region, suggesting hefty fines and prison term sanctions for defiant service providers.
The proposal, which is in response to the fraud and money laundering risks in the virtual asset sector, requires domestic and international crypto firms seeking to operate within the jurisdiction to register with relevant authorities to ensure regulatory compliance.
Proposed sanctions include criminalization for non-compliant entities and lengthy prison sentences of up to two years. Additionally, the amendment introduces a new legal category for money laundering offenses linked to third-party payment accounts and crypto accounts on exchanges. If approved, the law will penalize offenders who use crypto to launder money with up to five years of imprisonment and fines of up to $1.5 million.
However, the amendments’ implementation is pending review by the Legislative Yuan, Taiwan’s national parliament, before they can be enacted.
On the Flipside
- On March 4, 2024, local media reported that Taiwan’s Financial Supervisory Commission (FSC) will introduce a new draft for crypto regulation by September 2024.
- In October 2023, Taiwan’s legislative body introduced the “Virtual Asset Management Regulations” bill.
- The Hong Kong regulatory body is also tightening oversight of its local industry.
Why This Matters
Taiwan’s introduction of a crypto-focused regulatory association signals a further step toward ensuring a regulated and compliant local crypto industry. With the involvement of service providers, the initiative may introduce clearer pro-industry regulatory standards, potentially boosting industry participation and success.
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