ACE Exchange Fined NT$1.52 Million
According to the United News Network, ACE Exchange, one of Taiwan’s top three exchanges, was exposed for fraud on January 4th this year. Former executives Pan Yizhang and Wang Chenhuan were suspected of cryptocurrency fraud, illegally raising hundreds of millions of dollars. A total of 11 individuals involved in the case were detained and denied visits. Cash amounting to NT$110 million and NT$108 million worth of cryptocurrency were seized, attracting attention and discussion within the community.
In addition to the disciplinary action taken against the former executives, the Financial Supervisory Commission, Securities and Futures Bureau, released a press release yesterday (18th), announcing the punishment for ACE Exchange. They were fined NT$1.52 million for violating multiple anti-money laundering laws and personal data protection regulations.
The Financial Supervisory Commission stated that in November 2023, they conducted a project inspection on ACE Exchange regarding anti-money laundering and counter-terrorism financing. They discovered four major violations that were in violation of Taiwanese laws and regulations.
Violation 1: Inadequate customer due diligence
ACE Exchange did not effectively implement enhanced due diligence measures for high-risk clients, nor did they have a clear understanding of the purpose and nature of establishing business relationships. Additionally, the exchange failed to adequately identify and verify customer identities, or properly identify the beneficial owners of corporate clients and assess the elevated 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 customer money laundering risk levels, nor did they properly record investigations or handling status of suspicious transactions alerts or alerts triggered by the same customer. Furthermore, they did not have a sufficient understanding of the sources and destinations of customer funds.
Violation 3: Inadequate record keeping
ACE Exchange did not retain complete wallet address data for external transfers of virtual assets conducted on behalf of customers, nor did they keep adequate records of customer interactions and transactions. They also failed to provide transfer data for virtual assets during the Financial Supervisory Commission’s audit.
Violation 4: Improper management of personal data
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 NT$1.52 million on ACE Exchange in accordance with Article 5, Section 2, Article 6, Section 5, Article 7, Section 5, Article 8, Section 4 of the Anti-Money Laundering Act, and Article 48, Section 2 of the Personal Data Protection Act.
