- It will help Japan to reduce crypto-related money laundering.
- These grants authorities the power to make information requests to exchanges.
Japan has decided to revise an existing regulation on money laundering in an effort to reduce the prevalence of crypto money laundering. The worldwide threat of cryptocurrency money laundering and illicit funding persists.
The decision was made by the Japanese government and reported by Nikkei Asia on Tuesday. There will be new regulations established in Japan to assist reduce the prevalence of cryptocurrency-related money laundering, the report said.
The laws in Japan that deal with money laundering are well advanced. Even still, when it comes to virtual currencies, the Act on Prevention of Transfer of Criminal Proceeds falls short. To rectify this deficiency, the government will examine existing legislation.
Incompliant Exchanges to Face Action
When the regulations for sending money to Japan are updated, cryptocurrencies will be included. User data sharing across exchanges is also validated by the review.
This essentially grants authorities the power to make information requests to exchanges on clients. User data including name and address, as well as transaction details, might be included. To learn more about how criminals use cryptocurrency to launder money, Japan is taking this step.
All forms of digital currency, including stablecoins, will be subject to the law. The appropriate authorities will next present the proposed change during the October 3 special Diet session. The revised law, if passed, would go into force in May of 2023. Incompliant exchanges will be issued mandatory remedial actions. Any disregard for the directives will, however, result in legal consequences.
Many crypto-related crimes have occurred in Japan, causing authorities to treat the sector seriously. Since this is the case, authorities have resolved to step up their monitoring of the crypto market. As a result, businesses and investors in the cryptocurrency market may anticipate harsher regulations in the future.