Taiwan’s highest legislative body has made amendments to existing digital asset laws to prevent anonymous cryptocurrency transactions. The proposal allows regulators to intervene and forces all crypto transactions to meet the same requirements enforced to prevent fraud and money laundering.
Cryptocurrency’s ability to facilitate private and anonymous transactions is the new technology’s hallmark. Taiwan’s Legislative Yuan’s changes to the Money Laundering Control Act and Terrorism Financing Prevention Act now gives the Taiwanese government free reign to audit and regulate these previously anonymous crypto exchanges. The Financial Supervisory Commission (FSC) will now be able to collect KYC personal data from those looking to transact in cryptocurrency.
The real burden of the new amendment falls on digital asset trading platforms. The online exchanges now will have to revamp their systems to require users to attach their real names to their accounts. This is referred to as the “real-name systems” that mandate identity is tied to crytpo trading platform registration.
All suspicious activity on the platforms that are alleged to be anonymous must be reported. The Ministry of Justice is looking to push cryptocurrency use into the existing legal framework for anti-fiat laundering.
Taiwanese congressman, Jason Hsu, popularly known as “the crypto congressman,” has been a huge advocate for distributed ledger technology (DLT). He has urged Taiwan to move away from ‘ban culture’ practiced in nearby countries like China and South Korea. Hsu is hoping to help usher in a new era of digital prosperity by keeping Taiwan a crypto-friendly. This new legislative measure goes directly against his mission.
“Just because China and South Korea are banning, doesn’t mean that Taiwan should follow suit – there is a huge opportunity for growth in the future,” said Hsu this past year during a parliamentary session.
The FSC has succumbed to the pressure for regulating cryptocurrency in the name of fighting crime. The regulations will not end at banning anonymous transactions, the FSC is also drafting guidelines to regulate the country’s initial coin offerings (ICOs) as well.