In recent years, digital credits used in online games have frequently been exploited by criminal enterprises for fraudulent schemes, money laundering, or fencing stolen goods. This is because such credits can be owned or transferred anonymously, purchased easily, transferred rapidly, and circulated broadly. Many victims have been deceived or coerced into purchasing digital game credits and then providing the top-up code to scammers.[1] As a result, online games and game credits have become one of the key targets in the Taiwanese government’s effort to combat fraud.
To prevent scams related to game credits, the Bankers Association of Taiwan proposed a measure to the Financial Supervisory Commission (FSC) in early 2024. The proposal suggested that credit card transactions for game credits, e-wallet top-ups, and electronic gift cards not less than TWD3,000 per transaction should be subject to a 24-hour delay before taking effect. However, this proposal faced opposition from people within the industry and the public, as they believed that before this approach would be able to actually prevent fraud, it would pose a significant inconvenience to online gamers.[2] While the proposal was ultimately not adopted, it did not alter the direction of the authorities’ policy of targeting online games and game credits as part of their anti-fraud strategy. As such, alternative regulatory measures were introduced, including enhanced real-time risk management for game credit transactions at the banking level and the establishment of a collaborative fraud prevention mechanism between banks and gaming companies.
These and other fraud prevention measures for game credits were later codified in the Fraud Crime Hazard Prevention Act (the “Fraud Prevention Act”), enacted in July 2024. The Fraud Prevention Act explicitly includes online game operators within its regulatory scope as part of Taiwan’s digital economy fraud prevention framework, with the Ministry of Digital Affairs (MODA) serving as the competent authority. The following sections outline the obligations and responsibilities of online game operators under the Fraud Prevention Act.
I. Obligations and Responsibilities of Online Game Operators under the Fraud Prevention Act
1.Definition of “Online Game Operators”
The Fraud Prevention Act defines “online game operators” as entities which provide online gaming services or those which issue online game credits that are exclusively used to redeem online gaming services or products.[3] In Taiwan, major game credit issuers include Gamania Group (issuer of GASH), Soft-World International Corporation (issuer of MyCard), Wanin International Co., Ltd. (issuer of YOE CARD) , MOL AccessPortal Co., Ltd. (issuer of Razer Gold), and Garena Technology Singapore Private Limited Taiwan Branch (issuer of Shells).[4]
2. Statutory Obligations
2.1 Fraud Prevention Measures, Collaborative Mechanism, and Account Suspension
The Fraud Prevention Act requires online game operators to exercise the duty of care of a prudent administrator and implement reasonable anti-fraud measures to prevent their services from being exploited for fraudulent activities. They may also provide users with information about fraud prevention.[5]
Online game operators may utilize the Game Credit Fraud Prevention Collaborative Platform[6] to caution their industry peers so that they can adopt reasonable measures to prevent their users from being exposed to fraudulent information.[7] In this circumstance, if any personal data is collected, processed, or used, such collection, processing, and use are authorized by law and won’t constitute violation of the Personal Data Protection Act.[8]
If an online game operator receives a notice from the police (or other investigation authorities with similar functions, collectively the “Judicial Police”) or the MODA that its services are suspected of being involved in scams, it must cooperate with the authorities and suspend the accounts of suspected users for a reasonable period.[9]
2.2 Data Retention and Cooperation in Criminal Investigations
Online game operators are obligated to retain data that are able to reconstruct users’ activities and individual transactions for a reasonable period. If the Judicial Police request information during an investigation of fraudulent activities, operators must provide the requested data within three days upon receiving the notice. Additionally, online game operators must retain such data for six months for investigative purposes and extend the retention period to three months after relevant court rulings become final if the case leads to legal proceedings.[10] Based on past fraud cases involving game credits, the requested data may include: user account information, IP logs, details about game credit transactions (purchases or transfers), and records about redeeming game credits.
2.3 Safe Harbor Provision
Under the Fraud Prevention Act, online game operators are exempt from confidentiality obligations when implementing anti-fraud measures or cooperating with authorities as required by the Act. Furthermore, if an operator’s compliance with the Fraud Prevention Act (such as suspending a suspicious user’s account) results in financial losses to the user or a third party, the operator is not liable for compensation.[11]
2.4 Penalties for Non-Compliance
If an online game operator fails to suspend the accounts of fraudulent users or provide requested data to authorities, it may face fines ranging from TWD100,000 (approximately USD3,080) to TWD2,000,000 (approximately USD61,600) and be ordered to rectify such failure within a specified period. If the operator fails to rectify the failure before the specified deadline, it may be subject to further fines until the failure is rectified.[12]
II. Recommendations
1. Continuation and Coordination of Existing Mechanisms
The Fraud Prevention Act primarily puts into legislation fraud prevention measures that had already been accepted and implemented by regulatory authorities, the court, the prosecutors’ office, and the Judicial Police, as well as mechanisms and self-regulating practices that game operators had already established based on consultations with the Taiwanese government prior to the Act’s enactment. These include the establishment of the Game Credit Fraud Prevention Collaborative Platform, as well as measures such as delaying game credit activation and the “fraud prevention card-locking system.”[13]
Following the enactment of the Fraud Prevention Act, we recommend that online game operators continue to cooperate with the court, the prosecutors’ office, and the Judicial Police in fraud prevention efforts and criminal investigations. Additionally, they should closely monitor regulatory developments and policy updates from the relevant authorities to ensure compliance.
2. Future Outlook
Unlike virtual currencies, which are already subject to anti-money laundering (AML) regulations, [14] game credits are not yet regulated under Taiwan’s AML framework. However, if the current mechanisms fail to prevent the illicit use of game credits, they could potentially be incorporated into AML regulations in the future.
During the 2024 amendments to Taiwan’s Money Laundering Control Act, the Legislative Yuan’s Legal Affairs Office proposed including “online game credit issuers” as a category of “designated non-financial businesses or professionals,” which are entities that due to the nature of their business or transaction patterns, are susceptible to money laundering and therefore require regulation.[15] Although this proposal was not adopted, and game credit issuers remain outside the scope of the Money Laundering Control Act, regulatory authorities may revisit this issue in the future. Therefore, game operators should remain vigilant and closely track policy developments and potential legislative changes in this area.
This is a translation of the original article in Chinese, which can be found here.
For more information on laws and regulations related to gaming, please contact Ling-ying Hsu at lhsu@winklerpartners.com.
Written on 7 March 2025 by Ling-ying Hsu and Andrew Lei.
Translated on 9 April 2025 by George Bobyk and Andrew Lei.
[1] See ETtoday (September 2024), “Elderly Man Attempts to Buy TWD30,000 In-Game Credits for Online Friend – Prevented Twice by Convenience Store Staff, Tells Police to Go Away” (https://www.ettoday.net/news/20240903/2810163.htm#ixzz8uH3Aaeay); CNEWS (October 2022), “Online Romance Comes at a Cost: 20-Year-Old Woman Scammed Out of TWD550,000 Buying GASH Points” (https://tw.news.yahoo.com/網路愛情交友要付費-20歲正妹遭詐55萬元買gash點數-081202335.html).
[2] See The Storm Media (October 2024), “24-Hour Waiting Period for Game Credit Purchases? The Three Cards Most Loved by Scammers – Anti-Fraud Policy Sparks Backlash from Gamers” (https://tw.news.yahoo.com/遊戲點數刷卡得等24小時-詐騙最愛連3張-打詐先打到玩家-政策大轉彎-065237153.html).
[3] See Article 2, Subparagraph 8 of the Fraud Prevention Act.
[4] See the press release from the Administration for Digital Industries, MODA (April 2023), “MODA’s Public-Private Collaboration with Game Credit Issuers Shows Early Success – Game Credit Fraud Drops Nearly 60%” (https://moda.gov.tw/ADI/news/latest-news/4797).
[5] See Article 36, Paragraph 1 of the Fraud Prevention Act.
[6] See Audrey Tang & Xiao-Ting Peng (July 2023), “Public-Private Joint Defense: Combatting Fraud with Precision” (https://pdis.nat.gov.tw/zh-TW/blog/公私聯防-精準打詐/).
[7] See Article 36, Paragraph 2 of the Fraud Prevention Act.
[8] See Article 19, Paragraph 1, Subparagraph 1 and Article 20, Paragraph 1, Subparagraph 1 of the Personal Data Protection Act; the explanation of the legislative purpose of Article 36 of the Fraud Prevention Act.
[9] See Article 36, Paragraph 3 of the Fraud Prevention Act.
[10] See Article 37 of the Fraud Prevention Act.
[11] See Article 38 of the Fraud Prevention Act and the explanation of its legislative purpose.
[12] See Article 41 of the Fraud Prevention Act.
[13] See the press release from the Administration for Digital Industries, MODA (March 2023), “MODA’s Administration for Digital Industries Proposes Online Gaming Anti-Fraud and Anti-Money Laundering Guidelines – Five Major Game Credit Issuers Invited to Strengthen Industry Self-Regulation” (https://moda.gov.tw/ADI/news/latest-news/4133); supra note 4.
[14] See Article 6 of the Money Laundering Control Act; Regulations Governing Anti-Money Laundering Registration of Enterprises or Persons Providing Virtual Asset Services; Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises or Persons Providing Virtual Asset Services.
[15] See the Legal Affairs Office, Legislative Yuan (May 2024), “Legislative Assessment Report on the Draft Amendments to the Money Laundering Control Act” (https://www.ly.gov.tw/Pages/Detail.aspx?nodeid=46868&pid=240618); Wen-Hui Peng, the Legal Affairs Office, Legislative Yuan (May 2024), “Analysis of Anti-Money Laundering Regulations for Online Game Credits” (https://www.ly.gov.tw/Pages/Detail.aspx?nodeid=6590&pid=240644