The Legislative Yuan, Taiwan's highest legislative body responsible for enacting laws and overseeing the government's actions, has officially amended its Anti-Money Laundering (AML) legislation to include digital assets.
Amended Anti-Money Laundering Legislation
Per the law, any firm seeking to offer virtual asset services, which include the exchange, transfer, or storage of digital assets or third-party payment services in the country, must compulsorily establish an AML system and present a capacity account.
Additionally, virtual asset service providers (VASPs) must strictly monitor transactions on their platforms and report any suspicious transaction involving digital assets to the appropriate enforcement authorities.
Noteworthily, as a local news outlet reported, companies that violate the policy risk a prison term of up to two years or a fine of NT$5 million ($153,000), underscoring the law's zero tolerance for defaulters.
New Law Aims To Protect Citizens
While the amended Anti-Money laundering legislation reflects authorities' deliberate attempt to crack down on companies providing cryptocurrency services, the Legislative Yuan reiterated that the laws aim to provide a safe community for its citizens to utilize the benefits of crypto, ensuring their safety in the digital economy.
The Legislative Yuan states, “The new laws aim to strengthen fraud prevention operations, combat fraud rings, and protect victims, with fraud prevention measures in the financial, telecommunications, and digital economy areas.”
Consequently, an inter-bank inquiry mechanism has been developed. It will enhance the platforms’ ability to verify transactions and take preemptive actions, including freezing funds, to prevent illicit activities.
Meanwhile, in the occurrence of fraudulent or illegal activities, digital asset platforms must return any remaining cryptocurrencies to victims. Therefore, service providers are unbounded by confidentiality obligations and are exempt from liability.
Notedly, the Legislative Yuan has also banned ads. It noted that ads might have links to fraudulent schemes. Interestingly, these recent happenings coincide with the recent uptrend of crypto crimes, underscoring their significance. Crypto investors and enthusiasts should anticipate the possible impacts of the novel policies on the market and its operation.
