Ministry of Justice Considers Law Amendment: Personal Currency Traders Required to Complete Anti-Money Laundering Declaration, Maximum Penalty of Two Years Imprisonment for Illegal Service Provision

Ministry of Justice Considers Law Amendment: Personal Currency Traders Required to Complete Anti-Money Laundering Declaration, Maximum Penalty of Two Years Imprisonment for Illegal Service Provision

Ministry of Justice Considers Law Amendment: Personal Currency Traders Required to Complete Anti-Money Laundering Declaration, Maximum Penalty of Two Years Imprisonment for Illegal Service Provision

Virtual currencies are frequently used by fraud groups in Taiwan as a tool for money laundering or as a medium for scams. These illegally obtained digital assets are converted into Taiwanese cash through layers of personal currency traders. According to statistics from the Criminal Investigation Bureau’s Anti-Fraud Center, over 700 million NTD in financial losses have been reported in the past four years.

However, according to the Liberty Times, under current regulations, even if the police and prosecutors trace personal currency traders who assist in these transactions, they can evade punishment by claiming to be “unaware third parties” who only assist in transactions to earn transaction fees. This makes it difficult for the prosecution to bring charges against these individuals. At most, they can only be fined by the Financial Supervisory Commission under Article 6 of the Anti-Money Laundering Act for “failure to establish internal control and audit systems for anti-money laundering” with fines ranging from 50,000 to 1 million NTD.

In light of this, the Ministry of Justice proposes to amend the Anti-Money Laundering Act to require currency traders to submit a “Declaration of Compliance with Anti-Money Laundering Regulations” to the Financial Supervisory Commission for record keeping before providing relevant transaction services. The declaration must include detailed information such as the company, responsible person, actual beneficiaries, personnel responsible for anti-money laundering, and virtual currency business projects. It must also be reviewed and signed by an accountant.

As of March 1st, 25 virtual currency platform operators have completed the Declaration of Compliance with Anti-Money Laundering Regulations.

It is reported that in the future, if personal currency traders provide virtual currency trading services without complying with the declaration, the Ministry of Justice will take action to impose sanctions. The preliminary proposed amendment is designed to impose a maximum sentence of two years’ imprisonment. Additionally, if currency traders are found to be involved in fraud or money laundering, they may face separate penalties.