Taiwan intends to tighten its digital asset rules with a proposed invoice searching for to criminalize digital foreign money crimes and impose harsher fines and jail sentences.
The brand new invoice targets VASPs serving Taiwanese traders and requires extra stringent rules to stamp out fraud and cash laundering. Proposed by the Ministry of Justice, it heads to the Legislative Yuan within the coming weeks with the assist of the Taiwanese authorities.
Monetary regulators within the East Asian nation have been hands-off with the business and have given VASPs a excessive diploma of autonomy. In March, the Ministry of Inside accepted an software for VASPs to type an business affiliation that can play a key position in formulating a regulatory framework.
Taiwanese VASPs have solely needed to adhere to an AML regime launched by the Monetary Supervisory Fee in 2021 and pay their taxes.
This might change with the brand new invoice. Whereas it reiterates the necessity to observe strict AML and monetary crime prevention measures, it extends to new areas akin to cybersecurity.
Critically, the proposed invoice would change digital foreign money offenses from civil to prison violations. Beforehand, VASPs confronted civil fees that they settled financially. At most, they confronted a shutdown of their firms.
Underneath the brand new invoice, authorities might cost offenders with prison offenses, which are a magnet for greater penalties and jail sentences.
Operators of unlicensed VASPs or who fail to fulfill the nation’s requirements danger imprisonment for as much as two years and fines not exceeding $1.5 million. Merchants who use third-party accounts to launder cash may very well be jailed for as much as 5 years.
The invoice additionally requires offshore VASPs to ascertain native companies to serve Taiwanese traders.
Up to now yr, Taiwanese authorities have handled growing digital asset crimes. Earlier this yr, they arrested the operators of ACE Alternate, a neighborhood platform whose executives allegedly used to push nugatory tokens and make tens of millions of {dollars}. Final December, they arrested a suspect accused of laundering $320 million by digital belongings.
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