Over the past year since Taiwan’s Financial Supervisory Commission (FSC) mandated real-name registration and anti-money laundering (AML) compliance for virtual asset service providers (VASPs), the local crypto landscape has seen significant transformation. A total of 26 platforms have now completed their official AML compliance declarations, leading to a notable decline in online fraud cases and enhanced trust among genuine users.
The regulatory shift, which took full effect on September 30, 2024, required all crypto platforms operating in Taiwan to submit formal declarations outlining their adherence to the Anti-Money Laundering and Counter-Terrorist Financing Act. This move was designed to bring transparency and accountability to the rapidly growing digital asset sector.
👉 Discover how compliant crypto platforms are shaping a safer digital finance future.
Regulatory Framework and Industry Response
Under Article 17 of the Virtual Asset Service Providers Anti-Money Laundering Measures, platforms must verify user identities using government-issued identification and bank account details. These documents must match exactly to prevent identity spoofing or fraudulent account creation.
Platforms are also required to implement ongoing Know Your Customer (KYC) procedures, including:
- Verification of ID and bank account at onboarding
- Mandatory wallet ownership confirmation
- Multi-step identity authentication for each transaction
- Monitoring of suspicious activities and reporting to law enforcement
While these measures led to a natural reduction in user numbers—particularly among casual or anonymous traders—the overall trading volume across compliant platforms remained stable. This suggests that real-name registration has effectively filtered out low-intent users while strengthening engagement from serious investors.
Real-Name Registration Leads to Sharp Drop in Fraud
One of the most significant outcomes of the policy has been the sharp decline in cryptocurrency-related fraud. According to internal data from major local exchanges, reported scam incidents dropped significantly starting in July 2025, just months after full enforcement began.
Previously, fraudsters exploited anonymous accounts to conduct phishing attacks, fake investment schemes, and money laundering through peer-to-peer (P2P) transactions. With mandatory identity verification now in place, such activities have become far more difficult and risky for criminals.
“We’ve seen a clear shift,” said a compliance officer at a leading Taiwanese crypto platform. “The number of fake listings and impersonation scams has decreased by over 60% since real-name rules were strictly enforced.”
Moreover, legitimate users report feeling more confident using regulated platforms, knowing that counterparties are verified and suspicious behavior is actively monitored.
👉 Learn how secure, regulated crypto trading environments protect user assets.
Challenges in Combating Crypto Money Laundering
Despite progress, challenges remain—particularly in addressing the inherent anonymity of blockchain transactions and the cross-border nature of digital assets.
According to the Ministry of Justice Investigation Bureau’s Anti-Money Laundering Division, key risks include:
- Pseudonymity: While not fully anonymous, blockchain addresses can obscure user identities without proper KYC.
- Lack of standardized KYC enforcement across global platforms.
- Cross-jurisdictional complexity: Funds can be moved across multiple countries and exchanges within minutes, making tracking difficult.
To counter this, regulators rely heavily on traditional financial data trails—such as bank transfers tied to crypto purchases—to trace illicit flows. However, as decentralized finance (DeFi) and cross-chain bridges grow in popularity, new monitoring tools will be essential.
Expansion of Compliance to International Platforms
In a critical development, the FSC has extended its AML declaration requirement to international crypto platforms with even minimal presence in Taiwan—such as technical teams or customer support units.
This means foreign-facing platforms serving Taiwanese users must now comply, regardless of where they are headquartered. The goal is to close regulatory loopholes that previously allowed unregulated entities to operate indirectly within the market.
So far, all 26 compliant firms have undergone on-site inspections by FSC officials to verify both documentation and operational practices. This hands-on approach ensures that compliance isn’t just theoretical but embedded in daily operations.
BTM Operators Face Scrutiny After First Money Laundering Case
The importance of strict oversight was underscored by Taiwan’s first confirmed Bitcoin ATM (BTM) money laundering case, which made headlines earlier this year. The incident involved a BTM operator being used as a conduit for illicit fund conversion.
In response, the FSC clarified that all eight BTM operators in Taiwan must submit AML compliance declarations. As of now, six have completed the process, while two are still under review and required to submit additional documentation.
Unlike traditional crypto exchanges, many BTMs previously allowed high-value anonymous transactions—making them attractive for money launderers. The new rules aim to eliminate this vulnerability by enforcing identity checks for large transactions and requiring full audit trails.
Frequently Asked Questions (FAQ)
Q: What is the purpose of real-name registration for crypto platforms?
A: Real-name registration helps prevent fraud, money laundering, and terrorist financing by ensuring that all users are properly identified and verified before trading digital assets.
Q: How many crypto platforms in Taiwan are currently compliant with AML rules?
A: As of 2025, 26 virtual asset service providers have completed their anti-money laundering compliance declarations with the Financial Supervisory Commission.
Q: Do I need a bank account to use a regulated crypto platform in Taiwan?
A: Yes. Users must provide valid ID and a matching bank account to complete registration. This ensures consistency in identity verification and supports financial traceability.
Q: Can I use a credit card to buy crypto under the new rules?
A: Currently, most compliant platforms only allow cash deposits for crypto purchases. The use of credit cards for virtual asset transactions is under regulatory review due to concerns about speculative risk.
Q: Why did some users leave after real-name rules were implemented?
A: Some users who valued anonymity or engaged in high-risk trading behaviors chose to exit the platform. However, this has improved overall platform integrity and reduced fraudulent activity.
Q: Are foreign crypto platforms required to comply with Taiwan’s AML laws?
A: Yes. Any platform serving Taiwanese users—even if based overseas—must comply if it has local operations like tech teams or customer service staff.
👉 Explore how global compliance standards are raising security in crypto trading.
Looking Ahead: Building Trust Through Regulation
Taiwan’s first year of enforced real-name registration marks a turning point for its crypto industry. By prioritizing user protection, transaction transparency, and regulatory accountability, the FSC has laid the foundation for a more mature and trustworthy digital asset ecosystem.
While challenges like cross-border enforcement and evolving DeFi risks remain, the results so far are promising: fewer scams, stronger user confidence, and sustained trading activity—all without sacrificing financial innovation.
As global regulators look to models like Taiwan’s, one thing is clear: the future of crypto lies in responsible, transparent, and user-centric regulation.
Core Keywords: virtual crypto platform, real-name registration, anti-money laundering, KYC compliance, crypto fraud prevention, Taiwan FSC regulations, VASP compliance, Bitcoin ATM regulation