Japan Implements Stricter Anti-Money Laundering Rules for Cryptocurrencies
TEHRAN (Tasnim) – The Japanese Cabinet announced on Tuesday its decision to enforce more stringent anti-money laundering regulations concerning cryptocurrencies, effective June 1.
The move aligns Japan's standards with those set by the Financial Action Task Force (FATF), which previously deemed Japan's measures insufficient in safeguarding users, according to KyodoNews.
The Cabinet emphasized the introduction of new mechanisms aimed at tracing criminal activities as the key highlight of the regulations. These mechanisms require more detailed information on crypto asset transactions, covering stablecoins and cryptocurrencies tied to currencies like the United States dollar or commodities.
Japan's Cabinet has made the decision to implement stricter anti-money laundering measures for cryptocurrency asset transactions, aligning its legal framework with global standards. In December, Japan revised its relevant laws after the Financial Action Task Force, an international financial watchdog, found its previous measures to be inadequate.
Monitoring agencies have been strengthening their oversight of crypto assets, which can be exploited for money laundering by disguising illicit funds through legal transactions.
One significant aspect of the new framework is the enforcement of the "travel rule," designed to enhance the tracking of criminal proceeds. Under this rule, a financial institution facilitating a crypto asset transfer must share customer information with the next institution, including the names and addresses of both the sender and recipient.
The targeted crypto assets encompass stablecoins and cryptocurrencies pegged to currencies such as the US dollar or commodities.
Violators who fail to comply with corrective orders issued by authorities will face criminal penalties.
