The Japanese government should introduce rules that target criminals who use crypto from crypto exchanges to launder money. These remittance rules are reportedly expected to be introduced next spring.
The Prevention of Transfer of Criminal Proceeds Act is supposed to be revised to make it mandatory to share customer information between cryptocurrency exchange operators.
This is supposed to track the money transfers of people who are dealing with illegal activities.
The rule involving the sharing of customer information requires the sharing of customer information that includes customer names and even addresses when there are cryptographic transfers between platforms.
This bill to amend the law must be submitted to the Diet’s extraordinary session, which must take place on October 3.
This bill seeks to add cryptography to money transfer rules, known as travel rules. It will enter into force in May next year.
The Financial Action Task Force (FATF) is an international organization that studies anti-money laundering measures. In 2019, the FATF recommended that countries adopt this rule.
This law will apply to stablecoins that are a form of crypto
This law will apply to stablecoins, a type of cryptocurrency that is tied to a fiat or fiat currency. The distribution of stablecoins is connected to a registry system, which will be implemented next spring.
This will happen when the Revised Appropriation Act is passed during the year’s regular session of the Diet and goes into effect.
The use of cryptocurrencies in Japan has become rampant in recent times. That is why the government plans to impose a wider control system of cryptocurrencies.
Cash transactions that occur between banks are recorded and also tracked by the Society for Worldwide Interbank Financial Telecommunications (SWIFT) when international money transfers occur.
It is also tracked by the Japan Bankers Association’s Zengin system when it comes to domestic money transfers, and both organizations record customer information.
Other acts to be reviewed at the same time
In addition, the Prevention of Transfer of Criminal Proceeds Act, the Foreign Exchange and Trade Act and the Freezing of International Terrorist Assets Act, all of which relate to money laundering, need to be reviewed.
This proposed amendment to the Foreign Exchange and Foreign Trade Act will add stablecoins to the list of regulated assets in May next year. This will prevent the transfer to sanctioned parties like Russia and also the transfer of sanctioned parties to third parties.
To prevent funding for nuclear development in North Korea and Iran, the revised law will require financial and real estate transactions in Japan involving the two countries’ nuclear programs to be regulated.
The FATF has suggested improvements to the law which it argues could serve as a loophole to finance nuclear development.