Taiwan's First Case: Kaohsiung Individual Currency Trader Arrested for Buying and Selling USDT, Could Private Cryptocurrency Transactions Violate the Law?

After the new system of the Money Laundering Prevention Law was put on the road, a 30-year-old man surnamed Chen in Kaohsiung, Taiwan, was arrested by the police for illegally engaging in virtual currency personal currency transactions for failing to complete registration in accordance with regulations. (Synopsis: The End of Personal Currency Merchants" Taiwan's new regulations on washing and prevention 11/30 on the road, unregistered are not allowed to provide virtual asset services) (Background supplement: The third reading of the amendment to the Money Laundering Prevention Law was passed: overseas exchanges and virtual currency dealers must be registered, and violators are punished with up to 2 years in prison and a fine of 5 million) In the third reading last July, the Legislative Yuan passed the "Draft Amendments to the Money Laundering Prevention Law", one of which focuses on "strengthening the supervision of virtual asset services and strictly prohibiting the use of virtual assets to launder money", and the newly added sixth new law for the first time will " "Virtual Asset Services" was incorporated into the formal regulations and went into effect on November 30 last year. After that, whether it is an exchange or an individual currency dealer, it is necessary to complete the money laundering prevention registration with the competent business authority. If they are not registered in accordance with the law, they will violate the criminal law and will be sentenced to fixed-term imprisonment of not more than 2 years, criminal detention or a fine of up to 5 million yuan or both, and a fine of up to 10 times that of legal persons. As for the exchanges that previously passed the money laundering declaration, according to the transitional provisions previously specially formulated by the FSC, operators in Taiwan that have completed the AML compliance declaration must register with the FSC by March 31 this year at the latest and formally complete the registration by September 30, otherwise they will not be allowed to continue to operate virtual asset business. The first illegal personal currency merchant case after the implementation of the new law According to Taiwan media today (9) "Liberty Times" report, a 30-year-old man surnamed Chen in Kaohsiung failed to complete the registration in accordance with the regulations, becoming the first illegal personal currency merchant case seized after the new system was put on the road. According to the police, since October last year, the man surnamed Chen has posted messages through virtual currency-related associations, claiming that "you can find me for coins" to find buyers, and privately meet to trade and sell Tether (USDT). The two parties met in Kaohsiung City, and after the buyer paid in cash, Chen Nan immediately transferred the corresponding amount of virtual currency to the wallet designated by the other party. In just one month between the implementation of the new law and Chen Nan's arrest, he completed at least 100 transactions with a trading volume of up to 400,000 Tether and an illegal profit of about 800,000 yuan. The police took action on 24 December last year to arrest Chen Nan and seize relevant evidence, including computer mainframes, mobile phones, money counters and Tether. Extended reading: The End of Personal Currency Merchants Taiwan New Rules for Washing and Prevention 11/30 on the road, unregistered are not allowed to provide virtual asset services Taipei illegal currency merchant studio, also swept up by the police In addition to personal currency merchants, the police also launched a sweep against unregistered physical currency merchant studios. On the 2nd of this month, the police seized an illegal coin dealer's studio called "Yuyou" on Chengdu Road in Taipei City. The studio sells Tether at a price 10% above the market price, trades it in cash, and has the clerk contact the upper level to complete the virtual currency transfer. Police investigations show that the studio has a monthly turnover of more than 200 million yuan and illegal profits of up to 20 million yuan. The police seized a number of relevant evidence on the spot, and sent two clerks surnamed Lin and Liu to justice according to the letter of illegal facts. Unclear definition of "provision of virtual asset services" may lead to legal disputes The point that the unsuccessful district would like to raise is that the unclear definition of "provision of virtual asset services" in the amendment to the Washing Prevention Law may lead to erroneous precedents and chaos. For example, if someone helps a friend to escrow and buy and sell cryptocurrencies with relatives and friends, is it also a type of "virtual asset service"? If there is a dispute between the two parties, is it possible for an interested person to report that he has not registered for money laundering prevention so that a judge can convict him under the Money Laundering Prevention Act? In this doubt, anonymous crypto companies have previously commented to the moving area: Legislators do not know that the ultimate purpose of cryptocurrencies is to lower the threshold of finance, so that all people can use unrestricted financial services, such legislation is restricting the use of cryptocurrencies, and cannot allow all cryptocurrency services to be controlled by the government, I am afraid that there will only be more underground transactions. Police appeal: unregistered cryptocurrency merchant transactions are illegal Police remind that at present, only 26 operators in Taiwan have completed the registration of virtual asset service industry (VASP) in accordance with the regulations, and the relevant list can be found on the official website of the FSC. The remaining unregistered individual coin dealers and coin dealer studios are all illegal operations, and can be sentenced to fixed-term imprisonment of not more than two years, criminal detention, or a fine of up to NT$5 million in accordance with the law. 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