Japan Plans to Implement New Crypto Transaction Rules to Counter Money Laundering

    TheMorningCrypto Desk
    TheMorningCrypto Desk
    Published on September 27, 2022 8:45 PM

    Updated on January 9, 2023 12:51 PM

    According to a report published on Tuesday by Nikkei Asia, Japan intends to enact remittance regulations to stop the use of cryptocurrency for money laundering.
    Japan Plans to Implement New Crypto Transaction Rules to Counter Money Laundering
    • The measures taken by Japan to fight money laundering and terrorism funding are having an impact, but the nation still has to focus its efforts in a few key areas if it wants to increase the efficiency of its AML/CFT framework.
    • In sectors that pose significant threats for the nation, including as money laundering and terrorism financing, Japanese authorities have been at the forefront of AML/CFT measures.
    • When it comes to gathering and using financial intelligence to look into and punish cases of money laundering and terrorism funding, Japan is doing well. Additionally, it shows that it collaborates positively with equivalents in other nations.
    • According to Nikkei Asia, the Japanese government intends to amend "The Act on Prevention of Transfer of Criminal Proceeds" to require exchanges to reveal user details when transmitting cryptocurrency to another exchange.
    • The guidelines are slated to go into effect in May 2023 after the change is presented to a legislative session in October.
    • The Financial Action Task Force (FATF), the global agency that monitors money laundering and terrorist financing, has recommended that governments introduce the "travel rule" for cryptocurrencies, which requires companies that deal in digital assets to share and screen customer data for transfers above a certain threshold.
    • Law enforcement needs to concentrate more on the laundering of proceeds in complicated, large-scale cases that frequently involve fraud and drug-related crimes, despite the fact that the risk of terrorist financing in Japan is low. This includes addressing the key risk areas, such as the risks associated with organised crime groups like "the Boryokudan." Additionally, authorities need to work harder to seize illegal proceeds.
    • Authorities in Japan actively reach out to enterprises to inform them of the dangers of funding proliferation. However, the nation must make sure that safeguards are implemented effectively to stop unintentional encouragement of sanctions evasion.

    Japan has taken significant steps to address the hazards associated with virtual assets and the service providers who deliver them, but now it must completely implement the precautions taken to prevent abuse.