ACE Exchange Fined 1.52 Million NTD
According to United News Network, ACE Exchange, one of the top three exchanges in Taiwan, 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. Eleven individuals involved in the case were detained and denied visitation rights. Cash amounting to 110 million NTD and cryptocurrency worth 108 million NTD were seized, sparking attention and discussion within the community.
In addition to the punishment of the former executives, the Financial Supervisory Commission – Securities and Futures Bureau released a press release yesterday (18th), announcing the disciplinary results for ACE Exchange. They were fined 1.52 million NTD for violating several anti-money laundering and personal data protection regulations.
The Financial Supervisory Commission stated that in November 2023, they conducted an anti-money laundering and counter-terrorism financing inspection on ACE Exchange and discovered four major violations, which were in violation of relevant laws and regulations in Taiwan.
Violation 1: Inadequate Customer Due Diligence
ACE Exchange did not implement enhanced due diligence measures for high-risk customers, nor did they have a proper understanding of the purpose and nature of establishing business relationships. Additionally, the exchange did not adequately identify and verify customer identities or properly identify the ultimate beneficial owners of corporate customers, and did not carefully assess and raise customer risk levels.
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. They also did not have proper records of investigations or handling status 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 retain complete records of wallet addresses for external transfers of virtual assets conducted for customers, nor did they keep records of interactions and transactions with customers. They also failed to provide transfer data for virtual assets during the Financial Supervisory Commission’s audit.
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.