FSC fines VASP for the second time: Rybit lacks anti-money laundering measures, fined 1.02 million NTD

Rybit Limited was fined 1.02 million New Taiwan Dollars on August 1, 2024, for violating anti-money laundering and personal data protection regulations. This is the second case of a penalty following ACE Exchange's fine for anti-money laundering deficiencies, with Rybit's fine slightly lower than ACE's. It is understood that these fines represent the minimum standard amounts for various violations.

FSC imposes first penalty on VASP: ACE Exchange fined 1.52 million New Taiwan Dollars for anti-money laundering deficiencies

The Financial Supervisory Commission (FSC) in Taiwan has imposed penalties on Virtual Asset Service Providers (VASPs)

The FSC stated that the following regulations were the basis for this disciplinary action:

• Article 5, Paragraph 2 of the Money Laundering Control Act
• Article 7, Paragraph 5 of the Money Laundering Control Act
• Article 8, Paragraph 4 of the Money Laundering Control Act
• Article 48, Paragraph 2 of the Personal Data Protection Act

The FSC stated that in November 2023, during a special inspection on anti-money laundering and counter-terrorism financing operations at a cryptocurrency company, deficiencies were found, indicating that the company had violated relevant regulations:

Inadequate Customer Review Measures

• No proper risk assessment conducted for corporate customers
• No defined regular review frequency and operational procedures for customers with established business relationships
• Failure to verify the identity of customers in accordance with regulations

Inadequate Ongoing Transaction Monitoring

• Failure to include the sources of virtual currencies provided by virtual currency suppliers in transaction monitoring
• Some transaction monitoring patterns involved the accuracy of basic information provided by customers but were not verified for accuracy

Incomplete Record Keeping

• Incomplete retention of customer transaction records, insufficient to reconstruct individual customer transactions

Inadequate Personal Data Protection

• Retention of customer personal data in external company systems without appropriate security measures

Penalty: NTD 1.02 million

The FSC indicated that based on the relevant provisions of the Money Laundering Control Act and the Personal Data Protection Act, the company in question was fined NTD 1.02 million as a disciplinary measure.

Tightened Rules! Taiwan Presidential Office announces amendment to Anti-Money Laundering Act: Illegal provision of virtual asset services punishable by up to two years in prison

Rybit Statement: Learning and Correction

Rybit released a statement in response to the administrative penalty letter from the Financial Supervisory Commission on August 1, 113: "We humbly accept and appreciate the guidance from the regulatory authority, providing us with the opportunity to learn and correct! We have made genuine improvements to address all deficiencies. In the future, we will adhere to the self-regulatory standards set forth by the Virtual Currency Association and all relevant regulations.

As a startup company in the virtual asset platform industry, we are fully aware of the significant responsibility we bear. We are grateful for the swift and clear regulatory guidance from the supervisory authority, which has helped us enhance our institutional framework and professionalism.

It is also noted that this penalty does not affect any customer rights.

Regards, XYZ Limited Company"