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The global crackdown on money laundering through the digital asset sector continues, with Taiwan’s top finance regulator drafting new anti-money laundering (AML) rules for virtual asset service providers (VASPs) and Australian authorities seizing $6.4 million in digital assets linked to global crime.
Taking the baton from the European Union, which voted this spring to adopt a package of AML laws to enhance “due diligence measures and checks on customers’ identity,” and more recently, China, whose Legislative Affairs Commission announced possible revisions to the country’s AML law in September, Taiwan’s Financial Supervisory Commission (FSC) has also revealed that it had drafted new regulations targeting VASPs and requiring them to complete enhanced AML registration or face criminal penalties.
In an October 1 statement, the FSC—an independent government agency responsible for regulating securities markets, banking and the insurance sector in Taiwan—said that the new regulation will come into effect on January 1, 2025, and require digital asset firms to register by the end of September next year.
This follows Taiwan’s parliament announcing in July significant amendments to its existing AML regulations, initially introduced in 2021. The changes mandated digital asset exchanges and VASPs to register for AML compliance. Prior to this, VASPs were not accounted for under the country’s AML rules.
As of the July 2024 amendment, individuals and businesses using or providing digital asset services in Taiwan would have to comply with AML laws and register their service capacity when the rules come into play next year.
In its latest update to the rules, the FSC specified that regardless of whether a digital asset provider has completed the existing compliance declaration, “all providers must follow the new VASP registration regulations and complete the registration process.”
Specifically, in addition to the longstanding AML obligations, the new regulations require qualifications for the management team and include corporate responsibilities such as transaction security, consumer asset protection and information security, said Kevin Cheng, secretary general of the Taiwan Fintech Association, as reported by the Block.
Those that don’t comply could face imprisonment for up to two years and a fine of up to NT$5 million (US$155,900), according to local media outlet RTI, citing the FSC.
Meanwhile, Australian authorities have also upped the stakes for those abusing the digital asset space for criminal purposes.
Australia continues campaign against crypto-crime
The Australian Federal Police (AFP) has also announced the seizure of AUS$9.3 million (US$9.3 million) in digital assets linked to the alleged head of an encrypted communication app, ‘Ghost,’ used by criminal organizations.
The assets were seized after an analytics specialist within the AFP-led Criminal Assets Confiscation Taskforce (CACT) deciphered the account’s “seed phrase”—a sequence of words that provide the information required to recover a lost or damaged digital asset wallet—following analysis of digital devices recovered from the alleged mastermind’s home in a September 17 raid. The suspect, 32-year-old Jay Je Yoon Jung from New South Wales, was also arrested during the raid.
The assets were seized under the Commonwealth Proceeds of Crime Act 2002 as part of an ongoing crackdown on illicit digital asset activity in the country, named “AFP Operation Kraken.” It was the second such action connected to Operation Kraken, after assets linked to a syndicate in Western Australia were seized by the CACT in September.
According to the AFP, the operation has resulted in 46 arrests, 93 search warrants and the seizure of 30 illegal firearms, AUS$2.37 million (US$1.62 million) in cash, and AUS$11.09 million (US$7.5 million) in digital assets.
“The restraint of these assets shows the technical capabilities and powers that the AFP, and our partners through the CACT, are able to bring to bear on organized crime,” said acting AFP Commander Scott Raven.
“Whether you have tried to hide them in real estate, cryptocurrency or cash, we will identify your ill-gotten goods and take them away from you, leaving you with nothing.”
The AFP added that the confiscated funds will be placed into a special purpose account managed by the Australian Financial Security Authority to be used for “crime prevention, intervention or diversion programs or other law enforcement initiatives across Australia.”
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