Taiwanese man arrested for illicit USDT use, first case under new AML laws

Taiwanese authorities have apprehended a 30-year-old man, identified as Chen, for operating as an unregistered virtual currency dealer under newly enforced anti-money laundering regulations.

Chen, based in Kaohsiung, had been using Facebook groups to solicit cryptocurrency trades and arrange in-person transactions where he exchanged Tether (USDT) for cash. 

Despite the new law, Chen reportedly completed hundreds of transactions in less than a month, selling 400,000 USDT and profiting NT$800,000. Police arrested him on December 24 and seized computers, mobile phones, cash counters, and safes as evidence.

This marks the first case of its kind since the Virtual Asset Service Provider registration system became effective on November 30, 2024, according to local media outlet The Liberty Times. 

The system, mandated by the Money Laundering Prevention Act, prohibits unregistered entities from offering virtual asset services. 

Unregistered coin dealers 

In a separate raid, authorities targeted an unregistered “coin dealer studio” on Chengdu Road in Taipei. The operation, run by clerks surnamed Lin and Liu, was found to be selling USDT at a 10% premium.

Investigations revealed that the studio generated over NT$200 million in sales last month, yielding a profit of NT$20 million, or roughly $600,000. Employees at the studio were reportedly paid NT$40,000 monthly.

The Financial Supervisory Commission has emphasized that only 26 registered entities are authorized to provide virtual asset services. Engaging in illegal currency trading can result in penalties, including up to two years in prison or fines of up to NT$5 million.

Authorities have increased surveillance of online platforms to identify illicit operations and are urging the public to transact only with approved providers.