The Japanese authority should introduce policies that target criminals utilizing digital tokens from trading platforms to launder cash. Reports suggest the remittance rules will arrive by the coming springtime.
Moreover, the associated parties should revise the Act on Prevention of Criminal Proceeds to ensure its mandatory to share client information between crypto exchange operators. That will track cash transactions of individuals partaking in illegal dealings.
The policy that involves client information sharing needs the transfer of info that includes the client’s address and name when transacting on trading platforms. The drafted law will go to the Diet session scheduled for 3 October.
This bill will add cryptocurrency to the cash transfer rules (travel rules). It will start operating in May 2023. The FATF (Financial Action Task Force) is a global organization entitled to anti-laundering policies. FATF recommended the rule to countries in 2019.
The Regulation Will Apply to Crypto-Stablecoins
The rule will apply to cryptos linked to fiat – stablecoins. Meanwhile, the stablecoin distribution remains connected to a registration scheme – due next spring. That will occur after passing the reviewed Fund Settlement Act during the Diet ordinary session.
Crypto usage in Japan has been rampant recently. That pushed the government to introduce a broader monitoring structure for digital coins. Meanwhile, SWIFT (Society for Worldwide Interbank Financial Telecommunications) will record and trace money transactions between banks amid global transactions.
Moreover, the Japanese Banker Association will trade domestic cash transfers, with both organization recording client information.
Revision of Other Acts
Moreover, the Foreign Exchange & Foreign Trade Act, Prevention of Criminal Proceeds Act, and International Terrorist Asset Freezing Act – all connected to money laundering – required revision. The proposed Foreign Exchange & Foreign Trade Act amendment will add stablecoins to regulated assets in May 2023. That will cancel transactions with sanctions parties like Russia.
Meanwhile, the new law will require monitoring of real estate and financial transactions in Japan to prevent funding nuclear activities in Iran and North Korea. Moreover, the FATF has called for improvement to the rule that argues it could act as a way of financing nuclear development.