The Financial Supervisory Commission imposed heavy penalties, two major exchanges violated the Anti-Money Laundering Act.
The Financial Supervisory Commission of Taiwan (hereinafter referred to as the Financial Supervisory Commission) imposed heavy penalties on the domestic cryptocurrency industry yesterday (11/26). Two major cryptocurrency exchanges—Modern Wealth Technology Co., Ltd. (MaiCoin) and BitoPro Technology Co., Ltd. (hereinafter referred to as BitoPro)—were each fined NT$1.5 million for violating anti-money laundering regulations. In December 112, the Financial Supervisory Commission conducted a special inspection on these two companies regarding anti-money laundering and combating terrorist financing operations, discovering multiple deficiencies, indicating that operators still need to strengthen compliance with regulations.
Details of the violations exposed, deficiencies attract attention
The Financial Supervisory Commission discovered the following issues with MaiCoin's anti-money laundering operations during the inspection:
Failed to conduct customer reviews as required and strengthen customer review measures.
Failed to incorporate suspicious transaction patterns disclosed by our association into monitoring, transaction monitoring patterns lack effectiveness, and did not set different transaction monitoring thresholds based on customer money laundering risk levels.
Failed to accurately record customer transaction situations.
For customers with abnormal transactions, their registration qualifications were canceled without investigation into their transactions or assessment of whether to report suspicious transactions, and no suspicious transaction reports were filed to the Ministry of Justice Investigation Bureau within the required timeframe.
BitoPro was found to have the following violations:
Failed to adequately understand the purpose and nature of establishing business relationships with customers, did not fully understand the source of wealth of high-risk customers, and failed to accurately identify the actual beneficiaries of corporate customers.
Failed to thoroughly review whether the transactions conducted by customers are consistent with the customers and their business risks, and did not inquire about their funding sources when necessary.
Failed to accurately record customer transaction data.
For suspected money laundering or terrorist financing transactions, there were suspicious transaction patterns as defined by the company, but no alerts were triggered and no investigations were conducted.
The exchange responded, emphasizing its commitment to strengthen compliance.
Regarding this fine, both MaiCoin and BitoPro issued statements expressing their respect for the Financial Supervisory Commission's decision and will immediately take measures for improvement.
[MaiCoin Group Statement]
According to today's announcement from the Financial Supervisory Commission's Securities and Futures Bureau, the penalty case against Modern Wealth Technology Co., Ltd. for violating the Anti-Money Laundering Act is explained as follows:
Modern Wealth Technology Co., Ltd., a subsidiary of the MaiCoin Group, will immediately begin to improve and correct the deficiencies identified by the Financial Supervisory Commission to implement the principle of protecting user assets and ensure normal company operations. This penalty from the Financial Supervisory Commission indicates that the virtual currency industry is now an industry that cannot be ignored. It is expected that in the future, there will be more demands for user protection, and the company will hold itself to higher standards while cooperating with regulatory authorities and relevant units, complying with the self-regulatory norms of the virtual currency association and its related regulations, and will actively promote the positive development of the virtual currency industry.
[BitoPro Group Statement]
Regarding the administrative penalties announced by the Financial Supervisory Commission today (11/26), our company appreciates the guidance of the regulatory authority. We are fully aware of our significant responsibility to lead the healthy development of the industry. Therefore, we have immediately formed a special project team to address the identified deficiencies and implement concrete improvement plans, develop more rigorous internal audit and control processes, strengthen internal education and training, and enhance the compliance awareness of all employees. We will also share compliance experiences with other operators to create a safer and more transparent investment environment.
We firmly believe that compliance is the cornerstone of the development of the virtual currency industry. In addition to actively improving internal compliance operations, we will continue to collaborate with regulatory authorities and partners from all sectors to invest resources in risk control, information security, technological innovation, and other aspects to bring more positive and compliant development to the virtual currency industry.
Regulatory intensity has increased, and the cryptocurrency industry faces new challenges.
The heavy penalties imposed by the Financial Supervisory Commission on the two major exchanges highlight the regulatory authority's high concern for virtual asset service providers in preventing money laundering and combating terrorist financing. The Financial Supervisory Commission emphasized that companies should continuously strengthen internal control measures to ensure compliance with regulatory requirements and avoid similar situations from occurring again.
It is worth noting that this is not the first time the Financial Supervisory Commission has imposed fines on cryptocurrency exchanges. Earlier this year, two other domestic exchanges, ACE and Rybit, were also fined NT$1.52 million and NT$1.02 million respectively for violating the Anti-Money Laundering Act and personal data protection regulations. Industry insiders believe that with the implementation of the registration system for virtual asset service providers in Taiwan, operators will need to operate under new legal standards. Although the process of integrating the fintech industry with regulatory authorities may be long and arduous, both operators and consumers will have clear compliance standards in the future, which will help build a healthier industry environment.
'The Financial Supervisory Commission strikes hard! Taiwan exchanges MaiCoin and BitoPro fined NT$1.5 million each for violating anti-money laundering regulations.' This article was first published on 'Crypto City'.