According to Nikkei, the Japanese government will enact transfer regulations as early as the following spring to stop criminals from utilizing cryptocurrency institutions to funnel cash. It will be necessary for platform operators to share customer data under the new Act on Prevention of Transfer of Criminal Proceeds. The action aims to monitor money transactions made by those involved in unlawful activity.
Tokyo Is Following Suit
A proposed legislative change will be presented before the extraordinary Diet session, which will start on October 3. The law will expand the definition of cryptocurrency in the travel guidelines that regulate money transfers. It is scheduled to be effective on May 2023.
In 2019, the Financial Action Task Force (FATF), a global group that studies anti-money laundering policies, suggested that nations adopt the rule. The United States, Germany, Singapore, and other countries already have enacted laws, and the European Union is getting set to do the same.
When transmitting cryptocurrencies to another platform, the amended regulation will oblige crypto companies to submit customer details, which include the consumer’s name and address. The law aims to track the locations and times of bitcoin transfers made by crooks.
If an exchange operator violates the regulations, they will be given governmental instructions and must comply with corrective actions. Criminal sanctions will be applied to those who disobey such orders.
Stablecoins, a class of crypto whose worth is tied to a form of legal cash, will likewise be governed by the law.
Beginning in the spring of 2014, when the updated Fund Settlement Act, which got approval during this year’s regular Diet session, goes into effect, the disbursement of these coins will be governed by a registration process. The administration will enact a more extensive monitoring mechanism for cryptocurrency in preparation for the growth of cryptocurrency in Japan.
Crypto ‘Anonymity’ Under ‘Siege’
For internal and international money transfers, the Japanese Bankers Association’s Zengin System and the Society for Worldwide Interbank Financial Telecommunications’ (SWIFT) retain customers’ details.
The Foreign Exchange and Foreign Trade Act and the International Terrorist Asset-Freezing Act, which are relevant to money laundering, will be updated concurrently with the Prevention of Transfer of Criminal Proceeds Act. Stablecoins will be included on the list of governed commodities in May 2023 due to the proposed amendment to the Foreign Exchange and Foreign Trade Act, which will bar transfers to and from sanctioned entities like Russia and other entities.
Countering Sanctioned Nuclear Programs
The updated legislation would also permit the regulation of financial and real estate deals made in Japan by individuals associated with North Korea’s and Iran’s nuclear programs to stop funding for atomic programs in those nations.
To go into force before the end of the year, the International Terrorist Asset-Freezing Act will be updated. The Foreign Exchange and Foreign Trade Act currently regulates operations with other nations.
By a U.N. Security Council decision, the Japanese government identified relevant parties in nuclear development in North Korea and Iran as sanctioned parties; nonetheless, the International Terrorist Asset-Freezing Act did not apply to them.
To close a gap that may be used to Finance Nuclear Development, the FATF had called for changes to the legislation.
Source: https://crypto.news/japanese-policies-on-cryptocurrency-transfers-target-money-laundering/