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Taiwan amends laws for cryptocurrency

Taiwan amends laws for cryptocurrency

November 6, 2018 6:00 am,

Taiwan’s legislature has amended the country’s anti-money laundering and terrorism financing prevention laws to include the regulatory requirements for cryptocurrency transactions.

Taiwan’s Anti-Money Laundering Regulations

The amendments grant the country’s top financial regulator (FSC) the power to clamp down on anonymous cryptocurrency transactions. Beyond regulating the digital currency transactions, the Financial Supervisory Commission (FSC) can also monitor crypto exchange operators.

Based on the new provisions being provided, the FSC will mandate all crytpocurrency exchange platforms to operate a “real-name system.” Exchange operators must insist that users register with their real identities. Banks can standstill unidentified transactions and report them to the financial regulator.

Before this development, some government officials launched a self-regulatory body for the country’s cryptocurrency and blockchain industry. The country’s crypto blockchain self-regulatory organisation is a voluntary coalition of industry participants tasked with drafting policies for the sector. These new provisions on anti-money laundering are possibly result of various dialogues between TCBSRO and the FSC.

Last year, the country’s law makers passed the Financial Technology Innovations and Experiments Act to create a “sandbox” for innovative fintech companies. Companies that see the law’s assessment will be allowed to operate without regulatory risks. ICO’s for example who gain the approval of FSC will be allowed to bypass certain regulatory requirements.

Money laundering is a prime apprehension for governments and institutional investors alike. Its use in virtual currency fraud appears on the rise. Though anti-money laundering regulatory frameworks exist for traditional financial transactions, there are calls for crypto-specific provisions. Further, the banks will also be required to report suspicious transactions.

According to the amended provisions, the non-financial enterprises that violate money laundering rules will be fined more than 50,000 yuan but less than 1 million yuan. In financial institutions that break the rules will be fined more than 500,000 yuan but less than 10 million yuan.

Hsu, a congressman from the Nationalist Party, has advocated against the calls for a cryptocurrency ban and instead called the country to take a different position to the hostile stances taken by neighbouring China and South Korea. “Just because China and South Korea are banning, doesn’t mean this country should also follow the same suit, since there is a huge opportunity for growth in the future. The country emulate Japan, where the cryptocurrency is treated as a highly regulated and highly monitored industry like securities.

The FATF lately announced plans to issue laws modifiable digital currencies in line with its global anti-money laundering standards. The Ethereum World news, the international regulator has amended its standards to include cryptocurrency transactions.