Japan is looking to mitigate the incidence of crypto money laundering in a recent decision to review an already-existing law on money laundering. The use of cryptocurrencies for money laundering and illegal financing has remained a global menace of late.
Japan will monitor transfers on exchanges
Prominent media outlet Nikkei Asia uncovered the decision from the government of Japan Tuesday. According to the report, Japan will be establishing some fresh decrees that will help the country check the rate of cryptocurrency money laundering.
Japan already has a well-established legislation addressing money laundering. Notwithstanding, the law dubbed the Act on Prevention of Transfer of Criminal Proceeds falls short when it concerns cryptocurrencies. The country will be reviewing the law as a means to address this shortcoming.
The revision will see to the inclusion of cryptocurrencies to the existing rules on money transfers in Japan. Additionally, the review will warrant user information transmission between exchange operators.
Generally, money laundering through cryptocurrencies capitalizes on the anonymity blockchain brings. Japan seeks to remedy this with the new review, as it will enable authorities to check transfers between parties for illegal purposes.
Noncompliant exchanges will receive corrective orders
Essentially, this gives authorities the power to request information on customers from exchanges. The information could include user data such as name and address and transaction information. Japan plans to find out how criminals move illegal funds through cryptocurrencies with this measure.
The law will apply to all digital assets, including stablecoins. Once the proposed amendment is made, the necessary authorities will submit it to the extraordinary Diet session slated for October 3. If approved, the review to the legislation will come into effect in May of 2023. Exchanges that do not comply will receive corrective orders. Nonetheless, the violation of the orders will lead to criminal penalties.
Japan has had its fair share of crypto-related crimes, prompting authorities to take the industry seriously. As a result, government has decided to improve on its surveillance of the cryptocurrency scene. Consequently, crypto entities and investors should expect some expect some stricter rules going forward.
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