As the virtual asset market in Taiwan continues to thrive, regulatory authorities are increasingly strict about requirements for Money Laundering prevention. Recently, San Chuan Token Co., Ltd. was fined 1.5 million New Taiwan Dollars by the Financial Supervisory Commission of Taiwan (FSC) due to multiple lapses in customer due diligence (KYC) and transaction monitoring. This incident highlights the ongoing challenges that Virtual Asset Service Providers (VASP) face in terms of Compliance.

The announcement released by the Securities and Futures Bureau of the Financial Supervisory Commission on July 29 shows that Sanchuan Token (operating the BitStreetX exchange) has violated multiple regulations of the Money Laundering Prevention Act. This penalty stems from a special inspection conducted at the end of 2024, which revealed significant flaws in the company's customer review, transaction monitoring, and record-keeping processes.

Specifically, the violations related to the San Chuan token include: failure to obtain the names of the senior management personnel of corporate clients as required; insufficient confirmation of the wealth and source of funds of high-risk clients; approval of increased deposit and withdrawal limits in New Taiwan Dollar without fully assessing the client's financial capability; failure to include the client's registered IP address in transaction monitoring; inadequate preservation of the closing dates for suspicious transaction alert cases; and discrepancies between the transaction information recorded in the accounting system and the actual situation, among others.

This incident is not an isolated case. Looking back over the past year, more than six virtual asset-related companies have been penalized for similar compliance issues. This series of punitive actions reflects the increasing compliance requirements imposed by Taiwanese regulators on the virtual asset industry, and also highlights the challenges that VASPs face in adapting to and meeting these requirements.

For the entire industry, these cases serve as a wake-up call. Virtual asset service providers need to pay more attention to and improve their Compliance systems, especially in areas such as customer due diligence, transaction monitoring, and data management. At the same time, this also reflects that regulatory agencies are working to balance innovation and risk control to ensure the healthy development of the virtual asset market.

With the continuous development of the virtual asset market, it is foreseeable that regulatory requirements will be further refined and tightened. For VASPs, proactively strengthening compliance management is not only necessary to meet regulatory requirements but also key to gaining user trust and achieving long-term sustainable development.