Japan to Toughen Remittance Rules to Fight Money Laundering Using Crypto: Report

The new rules would require crypto exchange operators to share customer information when assets are transferred between platforms.

AccessTimeIconSep 27, 2022 at 11:33 a.m. UTC
Updated Sep 27, 2022 at 2:47 p.m. UTC

Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

The Japanese government is planning to introduce new rules for remittances directed at stopping criminals from using cryptocurrency exchanges to launder money, according to a Nikkei report.

  • The rules will require exchanges to share customer information – including customers' names and addresses – when they transfer crypto between platforms.
  • The move is intended to provide Japanese authorities additional monitoring capabilities to track money transfers by people engaged in illegal activities. Violators could face corrective orders or criminal penalties, according to the report.
  • Japan's Act on Prevention of Transfer of Criminal Proceeds will be amended to include the new remittance rules. A draft amendment to the law will be submitted to a parliamentary session scheduled for Oct. 3 but the rules are expected to take effect in May 2023, the report said.
  • Japan's cryptocurrency exchanges have been in negotiations with the government about sharing customer information since last March, when Japan’s Financial Services Agency (FSA) ordered exchanges to implement a framework to fulfill the travel rule, which encapsulates the recommended anti-money laundering norms for crypto by global standard-setter Financial Action Task Force (FATF). Exchanges have noted concerns about heavy compliance costs.
  • The law will also apply to stablecoins, a type of cryptocurrency tied to the price of another asset – like the U.S. dollar or gold – to stabilize the price.
  • The report comes as the Japanese yen slides relentlessly against the dollar. The yen fell to a 24-year low of 145.90 per dollar earlier this week.
  • Sharp currency devaluations often have domestic investors scurrying to park money in overseas assets via cryptocurrencies.

UPDATE (Sept. 27, 12:43 UTC): Adds detail on market impact.



DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

CoinDesk - Unknown

Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.