The FSC's latest announcement states that three virtual currency operators were fined a total of over NT$3 million for improper anti-money laundering operations, highlighting the authorities' high regard for the prevention of money laundering and terrorist financing.
The Securities and Futures Bureau stated that Wei Ya Digital Technology, Chain Technology Co., Ltd., and Pioneer Digital Technology were inspected by the FSC for anti-money laundering and combating terrorist financing from November to December 2024, and deficiencies were found, leading to fines. The following are the details of each case:
Wei Ya Digital Technology fined NT$1.5 million
The FSC pointed out that Wei Ya Digital Technology Co., Ltd. (hereinafter referred to as 'Wei Ya Company') was fined NT$1.5 million based on Articles 5, 8, and 13 of the Anti-Money Laundering Act.
(1) There were issues in internal control systems and risk assessments regarding non-high-risk natural person customers, such as failing to understand the purpose and nature of the business relationship and risk assessment operations for customers who are beneficial owners of current important political positions abroad, according to the established review checklist, with failures to meet high-risk customer thresholds. (2) Failure to implement customer risk assessments, strengthen customer reviews for high-risk customers, conduct regular reviews, and settle and close accounts for warning customers as required. (3) Continuous monitoring of transactions had issues where customers reported by banks as involved in fraud were frozen in trust accounts but not assessed for reporting suspected money laundering transactions (STR) or investigations for transactions triggering suspicious transaction alerts were not properly conducted. (4) There were failures to retain evaluation records for identity verification operations.
Chain Technology Company fined NT$1.02 million.
Chain Technology Co., Ltd. (hereinafter referred to as 'Chain Technology Company') was fined NT$1.02 million based on relevant provisions of the Anti-Money Laundering Act and the Personal Data Protection Act.
(1) There were omissions in investigating and assessing whether transactions suspected of money laundering or terrorist financing were reported. (2) Customer review measures failed to strengthen scrutiny of high-risk customers or verify the sources of wealth and funds to retain supporting documents before account approval. (3) Continuous monitoring of transactions did not re-confirm the identities of customers reported by banks as involved in fraud. (4) Customer personal data was stored in external company systems without appropriate security measures.
Pioneer Digital fined NT$500,000.
Pioneer Digital Technology Co., Ltd. (hereinafter referred to as 'Pioneer Digital Company') was primarily fined for failing to properly execute customer reviews and was fined NT$500,000.
(1) There were omissions in investigating and assessing whether transactions suspected of money laundering or terrorist financing were reported. (2) Customer review measures failed to strengthen scrutiny of high-risk customers or verify the sources of wealth and funds to retain supporting documents before account approval. (3) Continuous monitoring of transactions did not re-confirm the identities of customers reported by banks as involved in fraud. (4) Customer personal data was stored in external company systems without appropriate security measures.
Case Review: From the first fine to industry giants, VASP's anti-money laundering measures enter an era of heavy penalties.
The fines imposed on these three technology companies are no isolated case. Reviewing the FSC's supervisory dynamics over virtual asset service providers (VASPs), the enforcement of penalties has become the norm and is gradually tightening.
The first fine: The online currency exchange sets the stage.
In July 2024, Taiwan's Financial Supervisory Commission (FSC) imposed fines on VASPs for the first time, starting with ACE Digital Innovation Co., Ltd. (ACE Exchange). The company was fined NT$1.52 million for failing to implement KYC, not verifying customers' sources of wealth, not reporting suspected money laundering transactions, and having inadequate internal control mechanisms, becoming the first case of a fine for anti-money laundering in Taiwan's virtual asset sector.
This fine symbolizes the authorities' formal implementation of compliance standards for the virtual asset industry and marks the beginning of a series of inspections and penalties for VASPs. Next, the now-defunct Rybit was fined NT$1.02 million for violating anti-money laundering and personal data protection regulations.
Industry leaders are not exempt: MaiCoin and Bito face heavy fines
In November 2024, two major exchanges in Taiwan, MaiCoin Group (Modern Wealth Technology Co., Ltd.) and Bito Group, were both fined NT$1.5 million. The FSC imposed penalties based on Articles 5, 7, 8, and 10 of the Anti-Money Laundering Act.
Taiwan's FSC has clearly stated that it will continue to strengthen anti-money laundering supervision of virtual asset service providers (VASPs), and the frequency of inspections and severity of penalties may further increase in the future.
This article reports that three virtual currency operators violated the Anti-Money Laundering Act, with the FSC imposing fines exceeding NT$3 million, first appearing in Chain News ABMedia.