The Taiwan government has reached an agreement with relevant departments to strengthen the management of the increasingly prevalent virtual asset trading issues. This will be achieved through amending the anti-money laundering law and implementing new regulatory measures. These measures include implementing a registration system, establishing stricter capital and cybersecurity requirements, and imposing criminal liability on unregistered businesses.
Enhancing regulation begins with changing the registration system. Different countries have different capital thresholds. For example, Japan and Hong Kong have thresholds of 10 million Japanese yen and 5 million Hong Kong dollars, respectively. In the European Union, different thresholds ranging from 50,000 to 150,000 euros are set based on the type of business.
Yang Yueping, an associate professor at National Taiwan University, has proposed the establishment of specialized legislation for long-term strategies. In the short term, the current anti-money laundering law can be amended to address the reality of political and legislative costs. He suggests clearly defining the licensing system for virtual asset service providers (VASPs) within the existing anti-money laundering framework, including specific conditions for obtaining licenses and compliance requirements, with licenses being revoked for violations. Additionally, implementing self-regulatory norms can ensure stricter enforcement.
According to the Financial Action Task Force’s (FATF) regulations, VASPs must register or apply for licenses and comply with relevant anti-money laundering regulations. Different countries have different implementation methods. For example, the UK and Hong Kong adopt anti-money laundering licenses, while Singapore and Japan issue licenses for specialized payment institutions. South Korea has transitioned from anti-money laundering licenses to issuing new financial licenses similar to the EU after amending its laws.
To effectively combat fraud and money laundering activities, the government plans to introduce “warning account” regulations similar to the banking system. Under these regulations, if abnormal accounts involving fraud are identified, businesses can freeze them to reduce victims’ losses. Furthermore, last year’s amendment introduced provisions for “dummy accounts” to further prevent these accounts from being used for illegal purposes.
As of March 1st, the new provisions for “dummy accounts” have officially come into effect. These provisions mainly target financial institutions and virtual asset accounts, aiming to limit the daily use of these accounts, such as daily transfer and withdrawal limits, and the ability to close accounts when necessary. These measures help reduce illegal activities and enhance overall financial security.
As the government continues to advance these regulatory measures, the industry and the public have higher expectations for the safety and transparency of virtual asset trading. This not only demonstrates Taiwan’s progress in the fintech field but also emphasizes the necessity of high-standard regulation in the modern economy.