Providers of automated teller machines (ATMs) that allow people to purchase cryptocurrencies with cash have to comply with anti-money laundering (AML) regulations and conduct know-your-customer (KYC) practices, or face a penalty, the Financial Supervisory Commission (FSC) said yesterday.
The FSC made the remarks following a nearly month-long investigation after Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) on Dec. 23 raised questions about the machines’ operations during a meeting of the legislature’s Finance Committee.
The commission found that there are at least 24 bitcoin ATMs in Taiwan, which are operated by different companies for different purposes, Banking Bureau Chief Secretary Phil Tong (童政彰) said.
Photo: Bloomberg
One of the operators was among the 16 virtual-asset service providers that have reported to the commission about their compliance with AML regulations and practices, while the others are not regulated, he said.
“Some providers of those ATMs use the machines not as a tool to boost trade, but for marketing campaigns. They assign employees to tell people how to open an account at the companies’ digital platform to trade virtual coins online,” Tong said.
“However, we found that some ATMs allow consumers to trade cryptocurrencies without [the company] following KYC practices. Such providers might have contravened AML regulations,” he said.
The commission will ask the providers to work on AML compliance and failing that, they might be fined NT$500,000 (US$18,092) or more, he said.
In related news, the commission yesterday tweaked its regulations on security token offerings (STOs), but did not raise the fundraising limit of NT$30 million, despite calls from interested parties.
Companies wishing to raise more funds would still have to apply to run an experiment in the regulatory sandbox, the commission said.
“Companies that aim to raise more than NT$30 million are not small and they can raise funds via regular channels, such as an initial public offering,” Securities and Futures Bureau Deputy Director-General Kuo Chia-chun (郭佳君) said by telephone.
“As STO is a new fundraising mechanism and bears more risks, it is appropriate that STOs apply only to small companies,” Kuo said.
No company has filed for an STO since the regulations took effect in January 2020, data from the commission showed.
The commission has no plans to regulate non-fungible tokens (NFT) for the time being, as it does not consider the tokens securities, even though they have gained popularity in Taiwan lately.
“Although people can raise funds by launching NFTs, as they can by issuing bonds or shares, and tokens can be traded like bonds or shares, they are still different from the two main types of securities,” Kuo said.
NFTs are not issued to fund an operational project or business, but are issued as a digital certification of works of art, so the commission considers it more like a real product than securities, she said.
The commission would investigate any suspicious fundraising activity if investors file a report about being scammed, she added.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in