ACE Exchange Fined 1.52 Million NTD
According to the report by United News Network, ACE Exchange, one of the top three exchanges in Taiwan, was exposed for fraud on January 4th this year. The former executives, Pan Yizhang and Wang Chenhuan, were suspected of cryptocurrency fraud, illegally attracting hundreds of millions of NTD. A total of 11 individuals involved in the case were detained and denied visitation rights. Cash worth 110 million NTD and cryptocurrency worth 108 million NTD were seized, which has attracted attention and discussion within the community.
In addition to the punishment imposed on the former executives, the Financial Supervisory Commission’s Securities and Futures Bureau issued a press release yesterday (18th), announcing the disciplinary measures against ACE Exchange. The exchange was fined 1.52 million NTD for violating multiple anti-money laundering laws and personal data protection regulations.
The Securities and Futures Bureau of the Financial Supervisory Commission stated that in November 2023, the commission conducted an anti-money laundering and counter-terrorism financing inspection on ACE Exchange and discovered four major violations, which violated relevant laws and regulations in Taiwan.
Violation 1: Inadequate customer due diligence
In terms of customer due diligence measures, ACE Exchange did not conduct enhanced due diligence on high-risk customers nor fully understand the purpose and nature of establishing business relationships. Additionally, the exchange did not accurately identify and verify customer identities or properly identify the ultimate beneficial owners of corporate customers, nor did they prudently assess and raise the risk level of customers.
Violation 2: Transaction monitoring
The Financial Supervisory Commission pointed out that ACE Exchange did not establish different monitoring thresholds based on customers’ money laundering risk levels. They also failed to record the investigation reports or handling statuses of suspicious transactions or alerts triggered by the same customer. Furthermore, they did not have sufficient understanding of the sources and destinations of customer funds.
Violation 3: Insufficient record keeping
ACE Exchange did not keep complete records of wallet addresses for external transfers of virtual assets for customers or records of interactions and transactions. They also failed to provide transfer data for virtual assets during the commission’s inspection.
Violation 4: Improper personal data management
In addition, ACE Exchange stored customer personal data in external company systems without proper security measures.
Based on the above four violations, the Financial Supervisory Commission imposed a fine of 1.52 million NTD on ACE Exchange in accordance with Article 5(2), Article 6(5), Article 7(5), Article 8(4) of the Anti-Money Laundering Act, and Article 48(2) of the Personal Data Protection Act.