The Executive Yuan includes virtual assets in anti-fraud system, operators will be exempt from confidentiality obligations.

Financial fraud is on the rise, and the Financial Supervisory Commission (FSC) announced a series of updated measures today on 5/9 to combat financial fraud, including strengthening regulations, enhancing supervision, and extending to include the management of virtual assets. The new system aims to establish a more stringent protection network for the flow of funds and information, safeguarding the public from fraud.

Strengthening Regulations and Cross-Sector Collaboration: Incorporating Virtual Assets into the Protective System

The Financial Supervisory Commission has proposed the "Prevention of Fraudulent Crime Act," a new regulation aimed at enhancing requirements for financial institutions and virtual asset service providers to meet higher safety and protection standards. This also includes expanding the coverage to include deposit accounts, electronic payment accounts, credit cards, and virtual asset accounts under the same protective system to plug potential loopholes.

Enhancing Transaction Transparency + Real-Time Blocking of Fund Flow

The Financial Supervisory Commission emphasizes on enhancing transaction transparency and promptly responding to suspicious activities. Through the mechanism of alerting peer institutions, the transferring bank can immediately contact the receiving bank upon detecting abnormal fund flow to intercept suspicious funds in real-time. Additionally, the Financial Supervisory Commission mandates that financial institutions must take necessary measures and report to the authorities when suspecting accounts of fraud, effectively verifying and blocking illicit transactions.

Exempting Confidentiality Obligations! Strengthening Operators' Anti-Fraud Responsibilities

To ensure operators actively participate in combating fraud, the Financial Supervisory Commission explicitly states that operators will be exempt from legal liability arising from confidentiality obligations when implementing anti-fraud measures. Furthermore, specific penalties will be set for telecommunications and internet operators to ensure compliance and active promotion of anti-fraud knowledge among financial, telecommunications, and internet operators.

Efficiency in Fraud Prevention Improved Last Year, with a Significant Increase in Cases

In 2023, the Financial Supervisory Commission's fraud prevention measures have significantly improved interception efficiency, with a notable increase in the number and amount of intercepted cases. Looking ahead, the Financial Supervisory Commission will continue to strengthen law enforcement and regulatory measures, expecting comprehensive regulatory support and proactive cooperation from businesses to cut off fraudulent activities at the source and safeguard people's financial security.

Increased Regulation on Virtual Currency Exchanges

The Financial Supervisory Commission indicated that although virtual currency exchanges are already under regulation, there will be an increase in criminal liability in the future, requiring all exchanges, regardless of size, including foreign exchanges operating in Taiwan, to fully comply with local regulations and actively fulfill anti-fraud responsibilities. 25 virtual currency exchanges have already completed their anti-money laundering compliance statements, indicating progress and increased compliance awareness.

Through these updated regulations and strategies, the Financial Supervisory Commission is committed to creating a safer, more transparent financial environment to reduce the occurrence of fraud cases and enhance public trust in the financial system.

Taiwan's Executive Yuan promotes the "Anti-Fraud New Four Laws": foreign currency businesses must have a physical presence, unregistered operations could face up to two years in prison, and money laundering carries a penalty of five years.