Japan Tightens Cryptocurrency Regulation
The Japanese government is currently planning to introduce money transfer rules in the near future to minimize the possibility of money laundering through digital currencies. The country plans to stop criminals from using cryptocurrency exchanges to launder money. Under the new rules, cryptocurrency exchanges must share information and data about customers who transfer funds between platforms.
According to initial data, amendments will be made to the Law on the Prevention of Concealment of the Proceeds of Crime. This will allow the authorities to trace the funds and transfers of consumers suspected of being involved in illegal activities. Any violation of the new rules will result in criminal prosecution and punishment for users. This is an important event for the Japanese cryptocurrency community.
Japan to Introduce New Cryptocurrency Rules Next Year
It is reported that a draft amendment to prevent the transfer of illegally obtained income will be submitted to an extraordinary meeting of parliament. The conference, scheduled for October 3rd, will pave the way for new money transfer rules. With this amendment, cryptocurrencies will also be subject to the law on money transactions, also called “travel rules”. However, the new law is expected to come into force next May.
Back in 2019, the Financial Action Task Force (FATF) recommended that countries adopt these rules. FATF is an international, intergovernmental organization for the control of money laundering. It is a “political body” that generates the necessary political will for the adoption of national legislative and regulatory reforms. Several countries have since taken into account the FATF recommendations and made it part of their legislation. These include the USA, Singapore, Hong Kong, Germany and many others. In addition, the EU also intends to adopt this law in the future.
When the revised law is implemented, cryptocurrency exchanges will be required to provide user data when conducting transactions to other platforms. Its main purpose is to identify and identify criminals who are redirecting encryption. The law will also provide for control over the circulation of stablecoins. As the cryptocurrency community in Japan continues to expand, the country wants to introduce tools for better control.
Japan will also introduce a number of amendments to the legislation related to the fight against money laundering. Which include, “Law on foreign exchange and foreign trade” and “Law on the freezing of assets of international terrorists.” In addition, the updated law will restrict users from transferring assets under sanctioned entities such as Russia, and vice versa. Thus, stablecoins will be added to the list of regulated assets in May 2023. These events are expected to mark the beginning of a new era for the Japanese digital asset community.
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