Taiwan Virtual Currency Exchanges Enter the Real-Name System Era: Eight Major Platforms Unveil Creative Strategies to Respond

In July 2024, Taiwan’s Financial Supervisory Commission officially incorporated virtual currency platforms into the anti-money laundering regulatory framework. This significant policy change has brought unprecedented impact to the Taiwanese virtual currency exchange ecosystem. To comply with the standards set by the Financial Action Task Force (FATF), the FSC has decided to implement a real-name transaction system and has granted a one-year adjustment period for industry players.

The core goal of this policy is to require all exchanges to implement measures such as customer identity verification (KYC), transaction record keeping, and suspicious transaction reporting. Notably, the FSC held a public hearing in May with eight major operators, including Ace Digital Innovation, BitoPro, Maicoin, StarBit, Joyso, Statecraft, BitAsset, and Subo, to jointly discuss specific implementation plans for the new regulations.

The Moment of Truth for Taiwanese Virtual Currency Exchanges Has Arrived

As the real-name system policy officially launches, Taiwanese virtual currency exchanges face unprecedented compliance challenges. Platforms need to complete complex tasks such as user identity verification and information validation within a short period, while maintaining normal trading services. This has become a severe survival test for exchanges of different sizes and technical capabilities.

Lin Chih-Chi, Deputy Director of the Banking Bureau of the FSC, emphasized that although virtual assets like Bitcoin are not legal tender and have not been officially approved as financial products, they pose money laundering risks and must therefore be included in the anti-money laundering framework. This statement also reveals the inevitability and urgency of regulation.

Responses and Strategies of the Eight Major Exchanges

In response to the new regulations, each Taiwanese virtual currency exchange has reacted differently, reflecting their adaptability and strategic differences.

BitoPro Exchange has taken an aggressive approach. Since mid to late June, the platform has required all users to complete Level 2 real-name verification by the end of the month. Additionally, verified users must fill out supplementary information, including address details from their ID or residence permit, occupation, and income sources. BitoPro clearly states that users who fail to complete verification by the deadline will have their withdrawal, trading, and debt purchase functions suspended, and their open orders will be canceled until verification is completed.

Maicoin has adopted a stricter standard. Since early June, the platform has required new registrations and Level 1 users to complete identity verification. It also stipulates that new accounts can only be opened by legal adults over 20 years old holding a Taiwanese ID card, residence permit, or permanent residence certificate. Users who do not upload the required documents within the deadline will be downgraded to Level 0 starting in July, allowing only market price viewing and disabling trading functions.

Subo Exchange has chosen an aggressive suspension strategy. Since July, the platform has suspended trading operations, with no announced restart date. Until the end of July, users can still transfer assets out but cannot deposit new funds. This approach is undoubtedly a direct response to the compliance difficulties.

The hybrid decentralized exchange Joyso has made a thorough change. At the end of June, the platform ceased offering decentralized services such as “ETH JOYSO DEX” and “TRON JOYSO DEX,” and the website no longer supports deposits, trading, or withdrawals. Users must call smart contracts directly for withdrawals, bearing the risks themselves.

In contrast, Ace Exchange has demonstrated full preparedness. It is known that Ace partnered with the Big Four global accounting firms, KPMG, as early as 2018, and commissioned KPMG to provide legal compliance reports before launching. The exchange has already implemented real-name measures including name verification and personal data recognition. Ace stated that upon discovering suspicious transactions, it will cooperate with government investigation bureaus, the Criminal Police Bureau, and anti-fraud networks to strictly prevent scams and money laundering.

Anti-Money Laundering as a Global Consensus and U.S. Pressure

Taiwan’s move is not an isolated event but aligns with the global regulatory trend. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has publicly stated that one of the priorities of anti-money laundering policies is to prevent virtual currencies from being used as tools for online crime.

While FinCEN recognizes virtual currencies as bringing tangible innovation to the financial industry, it also admits that these assets have become the preferred currency for various online illegal transactions. Therefore, establishing corresponding anti-money laundering measures is an inevitable choice. This aligns perfectly with Taiwan’s FSC policy logic and reflects the increasingly strict global regulation of virtual assets.

Taiwan’s virtual currency exchanges are undergoing transformation amid this wave of international regulation. The advent of the real-name system is both a challenge and a necessary step toward industry standardization and institutionalization.