Japan’s government has approved a Cabinet resolution on October 14th to alter six laws connected to the Foreign Exchange Act in order to further prevent money laundering using cryptocurrencies.
Companies that deal in the exchange of cryptocurrencies are required by law to verify information such as the user’s name and to provide notification to the company’s operators.
The new law, which has received approval from the Cabinet, is going to be presented to the Diet during the session that is now ongoing.
Additionally, the penalties for offenses linked to money laundering will be enhanced, and the government of Japan will be given the ability to freeze the assets of organizations and persons that have been identified by the United Nations as being engaged in the proliferation of weapons of mass destruction.
Self-regulation has been sought from member organizations of the Japan Crypto Asset Exchange Association (JVCEA), which oversees the cryptocurrency exchange industry in Japan.
Around the same time in April, major local exchanges like Coincheck and GMO Coin started providing responses.
The revisions
The revisions don’t precisely aim at crypto companies. According to the reports, the Japanese government has been looking to strengthen anti-money laundering measures since September 2010.
In addition to various new precautions that haven’t been disclosed, the country will give itself the right to freeze the assets of individuals and institutions if they are involved in crimes related to money laundering.
However, given the wide usage of crypto exchanges and mixers, Japan considers digital asset trading a possible money laundering tool. Therefore the new revisions will also apply to crypto trading businesses as well. After the modification, platforms that offer crypto asset exchange services will be obligated to run a more detailed KYC process to confirm user identities.
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Japanese police say Lazarus Group behind many thefts
The Japanese government has also revealed that North Korea’s Lazarus group was behind years of crypto hacks in Japan. They said that phishing was one of the most common methods of attack. Officials issued the statement to raise awareness among the public. The group is also believed to be targeting Japanese businesses, and the National Policy Agency warned users against opening email attachments carelessly.
Japan working on multiple regulation changes
Japan, like most other nations, is keen on exerting more control over the crypto market. The Financial Services Agency has, time and again, made statements to that end. Officials are also reviewing corporate tax rules for crypto companies from 2023, following lobbying by crypto groups that say the tax rules are harsh.
The country passed a landmark law related to stablecoins following the crash of the Terra ecosystem. Meanwhile, it is working on its own CBDC, following the approach of Sweden and not China.
However, it is also keen on encouraging innovation and development in the space. The government has announced an interest in web3 to boost the economy. This would include a social integration of web3, metaverse, and NFTs.
A cabinet decision to revise six foreign-exchange laws closely follows a government plan to introduce new rules for remittances, all aimed at tightening AML measures for crypto.
Japan’s government has approved a cabinet decision to amend existing laws to curb money laundering using crypto, according to local news reports.
●The cabinet, which is Japan’s executive body, made the decision to move forward with the changes to the country’s Foreign Exchange Act and the Act on Prevention of Transfer of Criminal Proceeds on Friday, Bittimes reported over the weekend.
●The cabinet decision follows a Nikkei report from September that said the government was planning to revise the Act on Prevention of Transfer of Criminal Proceeds targeting remittances in an effort to stop criminals from using crypto exchanges to launder money. ●Japan has been looking to implement anti-money-laundering standards recommended by the Financial Action Task Force, a global watchdog, since last year, while local crypto exchanges have been fighting to limit the rules’ scope, citing compliance burdens and costs.
●The new amendments order crypto exchanges to share information like customers’ names and addresses when transfers are made between platforms, and could introduce penalties for entities that violate those rules.
●The revisions, which were approved by the cabinet, are now scheduled to be submitted to the National Diet, Japan’s legislature, the report said.