Type to search

Taiwan tightened anti-money laundering legislation to eliminate cryptocurrency anonymity

Story Highlights

  • Users have to use real names 

  • Fines for Cryptoexchanges

Anti-Money Laundering Act

Taiwan amended its AML legislation to incorporate cryptocurrency transactions into state legislation. Congressman Jason Hsu proposed an amendment to the Anti-Money Laundering Act in the country last month in an attempt to have cryptocurrencies face the same legal regress as traditional financial instruments, in addition to several additional rules specific to cryptocurrency. Hsu’s hope was that, by providing a solid legal foundation, investors would be enthusiastically entering the market, while new rules could help inform citizens about new technologies.

Cryptocurrency exchanges have to identify users

Now that the new law has been passed, the Financial Supervision Commission of Taiwan (FSC) may place a burden on the exchanges to conduct their own inspection and control processes, which will now require users to use their own names, rather than hiding behind pseudonyms. This means that banks can now put pressure on the exchanges for non-compliance with the AML and KYC guidelines. Cryptocurrency exchanges may now face fines for non-compliance with the new rules. Non-financial institutions can expect fines ranging from 7,300 to 145,000 US dollars, while financial institutions will receive much more significant penalties for non-compliance, from 73,000 US dollars to 1.45 million US dollars. In 2016, FSC amended its original anti-money laundering legislation, but it is believed that these changes did not have a significant impact on financial crimes. The Ministry of Justice is considering new regulations to a much greater extent in accordance with international standards.

In response, a spokesperson for the cryptocurrency exchange BitoEX said that anonymity is applicable only in cases of cryptocurrency transactions. Any transactions involving fiat money have always required complete user information and the correct name. Earlier this year, banks in Taiwan ordered FSC to identify bank accounts offered by Bitcoin trading platforms as “high risk customers”, requiring that transactions through accounts above a certain threshold be flagged to the regulator. FSC has shown that it also intends to implement the new ICO rules by June 2019.