Japan is planning to introduce tighter anti-money laundering (AML) regulations to tackle cryptocurrency felony following discussions with the G7 governments.
Despite the fact that Japan is well-known for its solid cryptocurrency regulations, felony is growing. Nonetheless, the Government is gearing up in its fight strict AML laws.
Japan Enforces Travel Rule to Fight Cryptocurrency Crimes
Reports by Kyodo News, Japan’s Cabinet intends to enforce travel regulations from June 1 to tackle money laundering and other criminal activities.
The rule makes it mandatory for exchanges to pass on customers’ details to the other party during cryptocurrency transactions.
The development came after the Financial Action Task Force (FATF) argued that Japan’s AML laws were insufficient. FATF is a worldwide money laundering and terrorist financing watchdog.
The Cabinet’s decision could have likewise been influenced by the Group of 7 (G7) leadership’s discussion on money laundering at the past few Hiroshima summit meeting.
Although while Japan is among the few countries having tighter cryptocurrency legislation, cryptocurrency crimes are still widespread. Reports by Coincub’s 2022 cryptocurrency felony annual report, Japan ranks Sixth according to amounts lost to cryptocurrency crimes.
The screenshot below shows that in 2022, Japan lost over $1.2 Billion to cryptocurrency fraud in 6 cases.
Forward-Looking Regulations
Although while FTX’s most other subsidiaries are going through bankruptcy, FTX Trading Ltd Japan resumed customer withdrawals in February.
Several credit Japan’s cryptocurrency regulations for protecting users’ assets after the FTX Trading Ltd collapse. Reports by Forbes, Japan’s Financial Service Agency’s (FSA) regulations include the following:
- Customer and company assets must be held separately, with holdings verified in annual audits.
- Investors can’t borrow greater than twice their assets for leveraged trades on exchanges.
- Exchanges must hold at least 95 percent of customer funds in cold wallets, which are not connected to the Internet.
Masaaki Taira, a member of the House of Representatives, informed Forbes:
“ Although while Western financial regulatory authorities seem to be single-mindedly focused on tightening regulations in the midst of what is being was known a cryptocurrency winter, I assess that Japanese financial regulatory authorities correctly understand the capacity of blockchain tech and other technologies and are working to design regulations in a forward-looking manner.”
