Taiwan to Introduce Tougher AML Guidelines for Crypto Firms

The Ministry of Justice in Taiwan has proposed four new amendments to the AML legislator of the nation. These regulations are directed towards cryptocurrency firms and may impose hefty penalties for non-compliance.

The amended laws intend to combat fraud and AML measures that are applicable to virtual asset service providers (VASPs).

The Ministry of Justice has also proposed amending the current laws to include jail terms of up to 2 years and a fine of $1.5 million. These amendments are going to be sent to the national parliament of Taiwan and forwarded to the legislator Yuan for review.

Yuan Proposes Laws to Combat Fraud

The Four Laws to combat fraud are proposed by the executive Yuan. These amendments will strengthen the pushback against fraud and allow regulators to prevent money laundering via cryptocurrency services.

The four critical components of these amended regulations cover fraud harm prevention regulations, money laundering prevention laws, technology investigation, communications security, supervision laws, and security laws.

The most important change is in the form of the new money-laundering prevents law that targets virtual asset service providers (VASPs). VASPs are set to face harsher penalties for non-compliance.

Taiwanese Regulators are Cracking Down Against Bad Actors in Crypto

The legislators in Taiwan have made three important edits to legislator. The first one is revised registration, the second and third ones are restrictions for local and global currency dealers.

Under these amended laws, VASPs may face jail time in the event that they continue to offer services without registration or relevant authority. The legislators have also created a new legal category for AML offenses that are associated with third-party payment accounts and virtual asset accounts.

The firms that are using third-party accounts for money laundering can land them in hail to serve a term of up to six months or five years. At the same time, the proposed fine on the defaulters has been set at around 50 million New Taiwanese dollars or $1.5 million.

The Deputy Minister of Justice, Huang Mouhsin, noticed that as per the current provisions, the regulators may penalize only the non-compliant crypto firms for administrative violations.

However, under these new proposed laws, criminal behavior can lead to hefty fines and prison time. These proposals are also implemented on foreign crypto firms that expose investors to risks.

Any firm found in violation of these guidelines may be subjected to penalties such as operations without local firms and applying for an AML registration. The latest proposal has issued a couple of months after the security regulator of the nation declared that it is working on new crypto laws to be issued in September.

Taiwan Court Indicts Ace Exchange Founder with Fraud

A Taiwanese court recently sentenced the head of Ace Exchange to 20-years jail time. The court has ruled that property found in possession of David Pan and other wanted criminals involved in the case is to be confiscated by the authorities.

Prosecutors working on the case issued an official statement on the matter noting that Pan carried out the scam in association with 6 other suspects.

Prosecutors have charged the executive with several counts of misconduct including money laundering and fraud. As per the investigators, these acts have led to a loss of 340 million in New Taiwanese dollars or $10.6 million.

Pan was arrested by the Taipei City police force alongside 14 accomplices in the first month of 2024. The arrests were the result of police raids on several locations such as the headquarters of Ace exchange.

The prosecution also found out that Pan was personally affiliated with one of the crypto wallet and card service used for fraudulent transactions.

As per the authorities, the fraud actors lured in their victims with promises of big returns using their offline OTC exchange and fake investment groups. However, once the target invested their funds, it was impossible to withdraw it and the user accounts were blocked.