Compliance
Japan's Crypto Regulations Tighten AML Fight – Moody's Analytics
Reports said that Japan is considering intensifying controls on AML via cryptocurrencies, a sign of how the area is a front in the battle against dirty money.
Japan’s government has given the green light to change money laundering rules that affect cryptocurrencies such as bitcoin, a move that has drawn applause from Moody’s Analytics.
Media reports said that Japan’s cabinet has decided to change to the country's Foreign Exchange Act and the Act on Prevention of Transfer of Criminal Proceeds. Policymakers wanted to revise the Act on Prevention of Transfer of Criminal Proceeds targeting remittances. Japan has been deciding whether to implement anti-money-laundering standards recommended by the Financial Action Task Force, since last year.
“The Japanese government's new AML measures represent the growing momentum to regulate the crypto space. Due to its historically underregulated and borderless nature, crypto has been at the root of much money laundering activity. However, as these new currencies continue to enter the mainstream, it is becoming increasingly important to tackle the illicit activity allowed to happen in the crypto space,” Chor Teh, director, financial crime compliance at Moody’s Analytics, said in a note this week.
“The reality is that money launderers are incredibly smart and will constantly seek out new loopholes to exploit. As such, governments and crypto organisations need to make sure the highest level of expertise is provided, and that the most up-to-date technology is being utilised in their AML measures. Only then will Japan’s new measures be effective,” Teh said.
Reports said that new amendments order crypto exchanges to share information such as customers' names and addresses when transfers are made between platforms. They could introduce penalties for entities that violate those rules.
Japan has taken a relatively tough stance on cryptos in certain respects; its tax treatment of digital assets such as tokens has also drawn criticism for driving business out of the country. (See a recent story on the subject here.)
