Japan set to crack down on crypto money laundering in recent law overhaul

Japan is seeking to mitigate the impact of crypto money laundering in a recent decision to review an already existing money laundering law. The use of cryptocurrencies for money laundering and illegal financing has remained a global threat in recent times.

Japan will monitor transfers on stock exchanges

The prominent Nikkei Asia news outlet unveiled the Japanese government’s decision on Tuesday. According to the report, Japan will establish new decrees that will help the country control the rate of cryptocurrency money laundering.

Japan already has well-established anti-money laundering legislation. Nevertheless, the law dubbed as the Prevention of Transfer of Proceeds of Crime Act falls short when it comes to cryptocurrencies. The country will review the law to remedy this shortcoming.

The review will see the inclusion of cryptocurrencies in the existing rules on money transfers in Japan. In addition, the review will ensure the transmission of user information between exchange operators.

Generally, money laundering via cryptocurrencies capitalizes on the anonymity provided by the blockchain. Japan is seeking to remedy this with the new review, as it will allow authorities to control transfers between parties for illegal purposes.

Non-compliant exchanges will receive corrective orders

Essentially, this gives authorities the power to request customer information from exchanges. The information may 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. After the proposed amendment is made, the necessary authorities will submit it to the extraordinary session of the Diet scheduled for October 3. If approved, the revised legislation will come into effect in May 2023. Exchanges that fail to comply will receive corrective orders. Nevertheless, violation of the orders will result in criminal penalties.

Japan has had its fair share of crypto-related crime, prompting authorities to take the industry seriously. As a result, the government has decided to improve its oversight of the cryptocurrency scene. Therefore, crypto entities and investors should expect some to expect stricter rules in the future.

Abigale .V. is a cryptocurrency writer with over 4 years of writing experience. She focuses on news writing and is adept at finding hot topics. She is a fan of cryptocurrencies and NFTs.

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