The Financial Supervisory Commission (FSC) of Taiwan has amended certain aspects of the Money Laundering Control Act and Terrorism Financing Prevention Act in order to give itself greater power over cryptocurrency service providers.
The FSC now has the power to demand that cryptocurrency exchanges and related services ensure customers are providing real names with verified identification. The move follows in the footsteps of several other countries that have recently implemented stronger Know-your-Customer (KYC) and Anti-money Laundering (AML) regulations.
Banks in Taiwan now have the power to reject any cryptocurrency transactions that don’t adhere to the new rules and report the behavior to the FSC.
Legal compliance has been a key element of the evolution of the cryptocurrency market in 2018, leading to a greater possibility of institutional adoption. Regulation is a double-edged sword though, as the nature of cryptocurrency relies upon certain elements of anonymity in order to maintain its core values and, in turn, its financial value. Institutional investment, on the other hand, is pertinent to drive widespread adoption – so a careful balance is required.
Taiwan’s Ministry of Justice believes the new regulations place the country in better stead with the rest of the world and ensures it performs better in its upcoming evaluation from the Asia/Pacific Group on Money Laundering.
Nearby Hong Kong has also recently updated its regulations regarding cryptocurrencies, developing a sandbox approach to new legislative requirements.