Taiwan Cracks Down on Digital Asset Fraud with 4 New Laws

Taiwan’s Executive Yuan has approved four new laws. These laws aim to combat fraud and enhance anti-money laundering measures. 

An official post released in a local newspaper ‘abmedia’ titled “New Four Laws to Combat Fraud” is designed to strengthen the government’s ability to tackle a wide range of criminal activities, particularly in the digital asset space. 

Understanding the New Legislation

These laws, collectively known as the “New Four Laws to Combat Fraud,” encompass four key areas: the Fraud Crime Harm Prevention Regulations, the Money Laundering Prevention Law, the Technology Investigation and Security Law, and the Communications Security and Supervision Law.

Together, these laws provide a robust framework to address fraud and money laundering, reflecting Taiwan’s dedication to maintaining financial integrity.

Strengthening Anti-Money Laundering Measures

The four new laws that have been implemented are not absolute. 

A significant focus of the legislative overhaul is the revamped Money Laundering Prevention Law, which places greater scrutiny on virtual asset service providers (VASPs) and introduces stricter penalties for non-compliance.

The updated registration requirements, special money laundering crimes, and domestic and foreign currency dealer regulations are three unique amendments to the Money Laundering Prevention Law. 

First and most important are the registration requirements. If any virtual asset service providers fail to comply with the required registration, they may face penalties of up to 2 years in prison. This strict registration compliance ensures that all entities dealing with virtual assets must comply with AML regulations.

Cracking down on money laundering

The newly amended law also mentions some special money laundering crimes. A special category for money laundering with virtual asset accounts involved and third-party payment accounts has been mentioned in the law. Prison sentences range from 6 months to 5 years, with fines up to NT$50 million, and wait for those who will be found guilty of using these accounts for money laundering.

Global Compliance

The updated law has set strict compliance rules that must be followed by both domestic and foreign currency dealers operating in Taiwan so that their compliance with the anti-money laundering laws is checked. The rule says foreign currency dealers must complete appropriate company registration or establish branches in Taiwan.

A Commitment to Oversight

The Financial Supervisory Commission’s Deputy Chairman Qiu Shuzhen discussed the FSC’s important role and its commitment to implementing strict supervision and internal control, which includes enhanced transparency. Twenty-five virtual currency exchanges completed legal compliance statements for money laundering prevention.

These laws signify Taiwan’s firm stance against financial malpractice and its dedication to market protection. By imposing stricter regulations, Taiwan aims to create a safer environment for virtual asset exchange, fostering legal protection and market stability.

In Conclusion

Taiwan’s adoption of the “Four Laws to Counter Fraud” sets a significant precedent in the global fight against financial misconduct. Its stringent measures serve as a model for countries grappling with similar challenges, offering a roadmap to mitigate risks associated with digital asset transactions.

Also Read How the laws & regulations affecting blockchain technology and cryptocurrencies, like Bitcoin, can impact its adoption.