Taiwan is strengthening its anti-money laundering (AML) laws, proposing harsher penalties for cryptocurrency firms that fail to comply. The Ministry of Justice has introduced amendments that would criminalize non-compliance, with imprisonment of up to two years for offenders. Currently, authorities can only impose administrative penalties on non-compliant firms.

Under the proposed changes, both domestic and foreign crypto firms operating in Taiwan must register for AML compliance. Foreign platforms would need to establish local entities and apply for AML registration, or face criminal penalties. Taiwan has required cryptocurrency service providers to comply with AML laws since 2021, but the industry remains largely unregulated.

The authorities also plan to include cryptocurrency in existing AML laws, with offenders using cryptocurrency for money laundering facing prison terms of six months to five years and fines of up to NT$50 million ($1.5 million). The proposed amendments will be reviewed by the Legislative Yuan, Taiwan's national parliament.

Meanwhile, Taiwan's crypto sector is working to establish an industry association, approved by the Ministry of the Interior in March. By setting up the association, crypto firms will develop self-supervisory rules based on the Financial Supervisory Commission's guidelines. The industry must complete all preparatory work and establish the association by the end of June.