Last Updated on September 28, 2022 by Bitfinsider
The Japanese government should enact laws that target criminals who use cryptocurrency from cryptocurrency exchanges to launder money. These remittance rules are expected to be implemented by next spring.
The Act on the Prevention of the Transfer of Criminal Proceeds is expected to be revised to make it mandatory for cryptocurrency exchange operators to share customer information.
This is intended to track the money transfers of people involved in illegal activities.
When there are crypto transfers between platforms, the rule that involves sharing customer information requires sharing customer information that includes customers’ names and even addresses.
This proposed legislative amendment will be presented to the extraordinary Diet session on October 3.
This bill aims to incorporate cryptocurrency into the money transfer rules, also known as the travel rules. It will be implemented in May of next year.
The Financial Action Task Force (FATF) is a global organization that investigates anti-money laundering measures. The FATF recommended that countries adopt this rule in 2019.
This law will apply to stablecoins, which are cryptocurrencies linked to fiat currency or legal tender. The distribution of stablecoins is linked to a registration system, which is scheduled to launch next spring.
This will occur when the revised Fund Settlement Act, which was passed during the regular session of the Diet this year, goes into effect.
In recent years, the use of cryptocurrencies has become widespread in Japan. This is why the government intends to impose a broader cryptocurrency monitoring system.
When international money transfers take place, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) records and tracks cash transactions between banks.
When it comes to domestic money transfers, it is also tracked by the Japanese Bankers’ Association’s Zengin System, and both organizations keep customer information.
In addition, the Prevention of the Transfer of Criminal Proceeds Act, the Foreign Exchange and Foreign Trade Act, and the International Terrorist Asset-Freezing Act, all of which are related to money laundering, must be revised.
This proposed amendment to the Foreign Exchange and Foreign Trade Act will include stablecoins on the list of regulated assets in May of next year. This will prevent transfers to sanctioned countries, such as Russia, as well as transfers from sanctioned countries to third parties.
The FATF has suggested changes to the law, arguing that it could be used to fund nuclear development.
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