The Cabinet of Japan has announced that tighter anti-money laundering measures will be implemented beginning June 1. The action attempts to improve the country’s legislative structure and align it with global norms for countering illicit cryptocurrency activity.
In December, Japan changed its legislation in response to concerns voiced by the Financial Action Task Force. This was done to address alleged deficiencies in its anti-money laundering efforts.
The new measures aim to monitor cryptocurrency transactions, which can be used to launder money. Money gained through unlawful means can be disguised as legitimate funds by using digital currencies. To counteract this, Japan is implementing the “travel rule” as a major component of the improved framework.
Moreover, financial institutions that facilitate crypto asset transfers will be obligated to share client information. They need to share it with institutions participating in the transaction under the travel regulation. This information will include the sender’s and recipient’s names and addresses.
🚨 Japan ramps up crypto anti-money laundering efforts!
Starting June 1, stricter measures will trace crypto transactions, bringing the nation in line with global standards.
The 'travel rule' requires institutions to share customer info, enhancing transparency.…
— Walletor (@walletorapp) May 23, 2023
In addition, stablecoins tied to currencies such as the US dollar or commodities are among the crypto assets being monitored. Authorities will issue orders to violators to guarantee compliance. Failure to follow these directions may result in criminal charges.
Furthermore, Japan’s efforts to strengthen its anti-money laundering safeguards are in line with global trends. Regulatory bodies throughout the world have increased their scrutiny of crypto transactions in order to combat illicit financial activities. Japan hopes to build a safer and more open environment for digital asset transactions.
Finally, with these new regulations, Japan takes a proactive approach to resolving the issues posed by cryptocurrency-related illegal activities. They are seeking to create a more safe and regulated environment in the long run.
You can also stay safe by reading our article on how to invest safely in crypto.