In conjunction with the amendment to the Anti-Money Laundering Act, the Financial Supervisory Commission announced earlier this month draft amendments to the "Registration Measures for Anti-Money Laundering for Businesses or Personnel Providing Virtual Asset Services" and the "Measures for Anti-Money Laundering and Combating Terrorism Financing for Virtual Currency Platforms and Trading Businesses", with a notice period of 30 days.
If existing industry players want to engage in virtual asset business, they must first complete an Anti-Money Laundering Compliance Declaration with the Financial Supervisory Commission. If they engage in business without completing the Anti-Money Laundering Compliance Declaration, the Financial Supervisory Commission may impose administrative penalties. The Financial Supervisory Commission has announced that the regulatory amendments will be phased out from January 1, 2025, and a registration system will be adopted. In the future, if they engage in business without completing the Anti-Money Laundering Registration, they will bear criminal liability.
Virtual asset industry registration system to be implemented next year
Huang Houming, deputy director of the Securities and Futures Bureau of the Financial Supervisory Commission, previously stated that starting next year, if operators want to engage in virtual asset business, they must register with the Financial Supervisory Commission for money laundering prevention according to the type of business they operate, including virtual asset exchangers, trading platforms, transferrs, custodians and underwriters.
The 26 virtual asset operators that have completed the Anti-Money Laundering Act Compliance Declaration must also reapply for Anti-Money Laundering Registration starting next year. The Financial Supervisory Commission has specially formulated transitional clauses. The 26 operators that have completed the Anti-Money Laundering Act Compliance Declaration must register with the Financial Supervisory Commission no later than March 31 next year, and must formally complete the registration before September 30 next year, otherwise they will not be allowed to continue to operate virtual asset business.
If virtual asset operators fail to complete registration by then but continue to operate virtual asset businesses, they will be subject to criminal penalties, with the maximum penalty being imprisonment of not more than two years and a fine of not more than NT$5 million.
According to the Financial Supervisory Commission, 25 of the 26 virtual asset operators that have completed the Anti-Money Laundering Act compliance declaration are engaged in virtual asset exchange business.
Huang Houming pointed out that after the registration system comes into effect, the current compliance declaration system will be abolished simultaneously. Regardless of whether the operator has completed the anti-money laundering compliance declaration, it must register in accordance with regulations starting next year. If there are operators who want to engage in virtual asset business now, they should consider whether to wait until the registration system comes into effect before submitting the application to avoid the trouble of having to reapply according to different regulations in a short period of time.
VASP Guild: Will help industry players complete preparations
In response to the Financial Supervisory Commission's announcement of the above two bills, the Taiwan Virtual Currency Association (VASP Association) stated that Taiwan has adopted a step-by-step approach to the regulation of virtual assets and has gradually formed an appropriate regulatory attitude, which is an important example of public-private partnership:
The legalization of regulation is a major milestone. The Virtual Currency Association actively cooperates with the Financial Supervisory Commission. In the process of drafting the draft, the government also widely collects opinions from industry players and reaches consensus. While protecting users and industry regulators, it creates a flexible space for industrial development. The rhythm and balance involved require the wisdom of everyone.
In the future, the Financial Supervisory Commission will formally implement the registration system, requiring businesses to improve compliance with cybersecurity and asset protection. The Association welcomes this development and will continue to maintain close cooperation with the competent authorities, and assist and guide businesses to complete preparations in accordance with legal regulations, and jointly promote the development of Taiwan's virtual asset market in a compliant and sound direction.
Bito: Positive attitude
After the registration system is implemented, it will inevitably affect the exchange. In response to this matter as an industry player, BitTorrent Exchange has gradually established various internal control mechanisms since its inception, covering transaction pattern monitoring, information security system, money laundering prevention, KYC management, product listing and delisting mechanisms, etc., and regularly cooperates with the competent authorities to adjust internal operating procedures and regulations on a rolling basis:
During the drafting of the registration system, the actual operating conditions of the industry players are fully reflected. BITCO expects to respond quickly to various preparatory work during the registration application process, and will also cooperate with the registration sub-law, anti-fraud sub-law and self-regulatory framework in the future to gradually strengthen the internal control mechanism.
Bito has a positive attitude towards the increasingly clear legal framework, cooperating with regulators to protect investors and enhance the transparency of industry operations. In terms of user protection, Bito has always used technology to solve problems. It not only develops its own risk management system, but has also recently started negotiations with a number of top international FinTech companies, aiming to introduce mature technologies and integrate them to bring higher security to the platform.