Crypto in Taiwan: Proposed AML changes could impose jail time for non-compliant firms

Taiwan seeks to criminalize cryptocurrency firms that fail to abide by anti-money laundering rules, authorities announced today.

The Ministry of Justice has proposed amendments to the existing anti-money laundering laws that would require domestic and overseas crypto firms seeking to operate in Taiwan to register for AML compliance. Failure to do so could result in imprisonment for up to two years.

Deputy Minister of Justice Huang Mou-hsin stated on Thursday that the authorities can currently only impose administrative penalties on non-compliant crypto firms.

Huang added that with the amendments to the AML law, such behaviors “would be criminalized,” and those violating the proposed rules would be subject to a sentence of up to two years. Overseas crypto platforms would need to set up local entities and apply for AML registration or they may face criminal penalties, according to the draft plan.

Currently, Taiwan requires cryptocurrency service providers to comply with anti-money laundering laws since the Financial Supervisory Commission introduced anti-money laundering rules in July 2021. Otherwise, the crypto industry remains largely unregulated.

The authorities also plan to write cryptocurrency into the current AML laws, proposing that offenders using cryptocurrency for money laundering could face six months to five years in prison and fines of up to NT$50 million ($1.5 million).

The proposed amendments will be sent to the Legislative Yuan, Taiwan’s national parliament, for review.

Taiwan’s crypto sector is also working to form an industry association, with the application already approved by the Ministry of the Interior in March. By setting up the association, crypto firms are expected to develop self-supervisory rules based on the FSC’s guidelines. The crypto industry is required to finish all preparatory work and officially establish an industry association by the end of June.