Taiwan's FSC Tightens Crypto Exchange Regulations: Registration Deadlines Shortened

The Financial Supervisory Commission (FSC) of Taiwan has announced a change in the registration deadline for cryptocurrency companies. The new deadline for submitting documents has been moved from January 1, 2025, to November 30, 2024. Officials stated that this decision is tied to the need to strengthen anti-money laundering (AML) measures.

Companies Face Stricter Compliance Requirements

Virtual asset service providers (VASPs) are required to submit a one-page form detailing their business operations. Additionally, companies must implement systems for accounting and financial auditing. The regulator emphasized that failure to comply with these rules could result in up to two years in prison or fines of up to 5 million New Taiwan dollars ($155,900).

Stringent Anti-Money Laundering Measures

A key component of the new requirements is adherence to AML rules and Know Your Customer (KYC) procedures. Specifically, cryptocurrency exchanges must:

• Monitor suspicious transactions.
• Collect customer names, banking details, and location data via IP addresses.
• Check for multiple addresses being used by the same IP address.

Any changes to a company’s business or the information provided must be reported to the Over-the-Counter Securities Trading Center (OTC) within five business days.

Tighter Regulations Following Exchange Penalties

The FSC’s decision to shorten the registration deadline followed penalties imposed on cryptocurrency exchanges MaiCoin and BitoPro for failing to comply with AML and KYC regulations. The regulator identified a lack of monitoring for suspicious transactions and improper record-keeping practices.

In November, the FSC introduced stricter requirements for listing digital assets, storing fiat and crypto assets, and maintaining financial records. These measures aim to enhance oversight and reduce money laundering risks.

By accelerating registration deadlines and enforcing stringent rules, Taiwan signals its ambition to lead in ensuring transparency and security in the cryptocurrency market.