Virtual Currency Anti-Money Laundering Law Approved, Financial Supervisory Commission Launches a New Era of "High-Level Regulation"

Virtual asset market governance ushers in a major turning point. Recently, Financial Supervisory Commission Chair Peng Jinlong told the Legislative Yuan Finance Committee that after the completion of the Virtual Asset Service Law, the Anti-Money Laundering Act for virtual currencies will become the core of regulation. The FSC will adopt a “highly supervised” standard for virtual asset industry operators and has already taken action on anti-money laundering measures—this year alone, penalties have been imposed on 11 crypto exchanges, totaling over NT$13 million.

Anti-Money Laundering Measures Become Urgent; 11 Industry Players Penalties Hit Record High

The FSC has conducted targeted inspections of virtual asset operators and found significant deficiencies in anti-money laundering, counter-terrorism financing, and proliferation financing prevention. According to the Inspection Bureau, the Securities and Futures Bureau has penalized 11 virtual asset service providers (VASPs) this year, with total fines exceeding NT$13 million, marking the strongest regulatory crackdown on virtual currencies in recent years.

Behind these penalties lies a core issue: the inadequacy of the virtual currency anti-money laundering system. Peng Jinlong emphasized that the current system still has loopholes, and the implementation of the special law will significantly strengthen anti-fraud mechanisms—requiring operators to establish “inter-industry information sharing” and expanding to “cross-industry reporting,” forming a comprehensive risk prevention network.

Upgrading Registration System to Licensing Supervision; Eight Subordinate Regulations to Build System Framework

Once the Virtual Asset Service Law passes the third reading, the FSC plans to formulate eight subordinate regulations by the first half of next year to comprehensively regulate the operational requirements of virtual asset operators. Seven of these regulations will specifically target VASPs, covering company establishment, financial management, internal audit and control, cybersecurity, outsourcing operations, anti-fraud measures, and handling of abnormal transactions.

These supporting regulations will embed the requirements of the virtual currency anti-money laundering law into every aspect of operators’ operations. For example, VASPs will be required to strictly separate proprietary and customer assets, establish margin and trust systems to ensure customer fund safety, and promote self-regulation through industry associations to create a market self-governance mechanism.

The most critical change is that the supervisory level will be upgraded from the current registration system, which only targets “anti-money laundering,” to a “licensing supervision” system. This means virtual asset operators will be incorporated into the regulatory framework for financial institutions, with capital requirements, internal controls, and financial standards that must be met.

Stablecoins Regulation Becomes the Final Piece; “Full Reserve Assets” as a Key Condition for Issuance

Among the eight subordinate regulations, the most anticipated is the regulation on stablecoin issuance and management, which is considered the ultimate implementation of the virtual currency anti-money laundering system. The FSC will clearly specify the qualifications of issuers, minimum paid-in capital, application procedures, eligible coin types, use cases, grounds for license revocation, reserve asset requirements, periodic audits, and the complete operational process for issuing and redeeming stablecoins.

Notably, the FSC is inclined to prioritize banks with “full reserve assets” capabilities as stablecoin issuers. This regulation directly enhances the enforcement of anti-money laundering measures for virtual currencies, as banks inherently possess robust AML mechanisms and customer due diligence systems.

“Not in a Hurry but Also Not Wanting to Fall Behind”; Taiwan Seeks Balance in Virtual Asset Regulation

In response to legislator Lin Defu’s concern that Taiwan’s penetration rate lags behind international standards, Peng Jinlong pointed out that although less than 5% of Taiwanese hold cryptocurrencies—far below the 10% to 15% in the US and South Korea—virtual assets are still a “developing market,” and countries are generally in the process of establishing regulations. The FSC’s attitude is “not in a hurry but also not wanting to fall behind”—ensuring market soundness and transaction security while providing reasonable space for industry development.

The new wave of virtual currency anti-money laundering legislation will mark a new phase in Taiwan’s virtual asset regulation. The FSC emphasizes that once the special law is enacted, the scope of regulation will cover transaction participant protection, financial stability, and market fairness, as well as strengthen financial inspections and anti-fraud measures to ensure market risks are manageable and transactions are secure. Industry experts generally believe this shift will reshape Taiwan’s virtual asset ecosystem.