According to a Nikkei report, the Japanese government is planning to introduce new rules for remittances aimed at stopping criminals from using crypto exchanges to launder money.
Japan is reportedly focusing, on and monitoring remittances involving cryptocurrencies in an attempt to prevent money laundering and will seek to mandate the sharing of customer information. The country is hard at work on several aspects regarding its regulation of the digital assets industry, including taxation. Many exchanges, such as Binance are eager to enter the Japanese market following succinct regulation. The local government has announced new actions in its bid to regulate the market and according to local media reports, the government is looking to monitor virtual currency transactions to prevent money laundering and would mandate the sharing of Know-Your-Customer (KYC) related information.
The government is likely to introduce new rules which would require exchanges to share customer information, including their names and addresses, when they transfer funds between platforms. Japan’s Act on Prevention of Transfer of Criminal Proceeds is to be amended to include these new remittance rules. The move is intended to allow the Japanese authorities additional monitoring capabilities to track funds transferred by people engaged in illegal activities. Violators of the proposed rules could face corrective orders or criminal penalties.
A draft amendment of the Act on Prevention of Transfer of Criminal Proceeds will be submitted to a parliamentary session scheduled for October 3, 2022. The amendments, if approved, are only expected to take effect in May 2023.
Negotiations have been going on with the country’s crypto exchanges and the government about sharing customer information since March 2021, when the country’s Financial Services Agency (FSA) ordered exchanges to implement a framework to comply with the travel rule – a rule which encapsulates the recommended anti-money laundering rules for cryptocurrencies by the global standard-setter, the Financial Action Task Force.
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