- Japan is drafting legislation to combat cryptocurrency money laundering.
- This will also apply to stablecoins.
- When transferring exchanges will be required to give customer information.
The Japanese government would allegedly implement remittance laws in an effort to prevent criminals from using cryptocurrency exchanges to launder money. The new restrictions are set to go into force next spring, maybe as early as May 2023.
The new measures, once implemented, will require customer identification when sending cryptocurrencies through various crypto exchanges. This will also apply to stablecoins as the Japanese government prepares to establish a more comprehensive crypto monitoring system in the country, according to Japanese media.
Japan has previously enacted the Act on Prevention of Transfer of Illegal Proceeds, which essentially prohibits the transfer of criminal cash. The statute, however, will be changed to require crypto exchange companies to share client information.
The move is intended to trace transactions made by those involved in illegal activity. Furthermore, the regulation will include cryptocurrency in the travel laws that regulate money transactions.
The Foreign Exchange and Foreign Trade Act, as well as the International Terrorist Asset-Freezing Act, which are both related to money laundering, will be revised.
The revised legislation would also allow anybody related to North Korean and Iranian nuclear initiatives to have their financial and real estate operations in Japan regulated.
When moving bitcoin to another exchange, cryptocurrency exchanges will be required to give customer information, including the consumer’s name and address, under the modified rule. The legislation intends to trace the locations and timings of illicit bitcoin transfers.
Furthermore, if a crypto exchange operator is discovered to be in violation of the regulations, they will be sent administrative instructions. Corrective steps must be taken in the trade in question. Those who defy such directions will also face criminal penalties.
