Japanese Government Decides to Impose Stricter Regulation on Highly Anonymous Crypto Assets

ByBhupender Singh

Oct 18, 2022 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Japanese Government Decides to Impose Stricter Regulation on Highly Anonymous Crypto Assets

The Japanese government passed a bill on Friday aimed at strengthening measures to prevent money laundering and cut off terrorist financing. Key elements of the bill are tighter regulation of cryptoassets, which are highly anonymous and often used illegally, as well as tougher penalties for money laundering.

The Cabinet meeting passed bills to amend six laws, including the Prevention of Criminal Proceeds Transfer Act and the Foreign Exchange and Trade Act, as measures to prevent money laundering.

Last year, the Financial Action Task Force, the global financial watchdog, urged Japan to improve its measures to combat money laundering and terrorist financing. According to the revised legislation, operators of crypto-asset trading businesses are required to confirm information such as user names and notify them between operators. Penalties for money laundering-related crimes will also increase, and the country will be able to freeze the assets of organizations and individuals designated by the United Nations as being involved in the proliferation of weapons of mass destruction. Amendments to the law approved by Cabinet will be presented to this session of Congress.

The government has been preparing to strengthen supervision and anti-money laundering measures for some time, and in late September 2010, Nikkei reported that new remittance rules would be introduced to virtual currency exchanges as an anti-money laundering measure. Behind this series of government moves are the travel rules advocated by the FATF (Financial Action Task Force). This is a rule for international wire transfers to prevent money laundering promoted by the same organization.

In Japan, the Japan Crypto Asset Exchange Association (JVCEA) has asked its member organizations to take self-regulatory measures. Major domestic exchanges such as Coincheck and GMO Coin began to respond around April. In addition, full enforcement began in October and now requires “obtaining recipient address information and transaction purpose information.”

It was revealed that the FSA issued a warning to the JVCEA in December 2009. Some people are concerned about the lag of anti-money laundering measures, noting that the JVCEA’s review method, decision-making process, background of the current situation, executive responsibilities, etc. are not yet clear, according to the person concerned.

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