Japan to Introduce Stricter Anti-Crypto Money Laundering Measures in June
In an effort to strengthen its regulatory framework and combat money laundering in the cryptocurrency space, Japan is set to implement new anti-money laundering (AML) measures in from June. The move is part of the country’s ongoing efforts to ensure the integrity and stability of its financial system while fostering the growth of the digital asset industry.
According to a recent report, the Japan Financial Services Agency (FSA) will introduce stricter rules and regulations to monitor and regulate cryptocurrency transactions. The Japanese Parliament decides to implement strict anti-money laundering procedures in accordance with the “Travel Rule”.
Applying stricter AML measures for cryptocurrency transactions
Japanese lawmakers have opted to implement more stringent anti-money laundering (AML) measures to track cryptocurrency transactions from June 1. According to a report by local media Kyodo News on May 23, the decision to apply stricter AML procedures has been made. by the Japanese parliament.
In an effort to harmonize its legal framework with international cryptocurrency regulatory standards, Japan is taking steps to improve its Japanese anti-money laundering (AML) practices. The decision to revise the AML legislation was prompted by concerns raised by the Financial Action Task Force (FATF), a global financial watchdog, about the adequacy of existing regulations in Japan.
Implementation of the “Travel Rule” Key element of the new measures for tracking the proceeds of crime
According to the reports, a crucial aspect of the newly introduced measures is the application of the “travel rule” to ensure more precise control of illicit funds. Under the “Travel Rule,” financial institutions involved in cryptocurrency transfers over $3,000 are obligated to share customer information with the receiving exchange or institution. This information includes the name, address and account details of the sender and receiver.
At the mid-May G7 meeting hosted in Japan, international leaders discussed the travel rule at length, gaining clear support from the G7 Committee for its implementation in crypto transactions. The G7 Committee expressed support for initiatives by the Financial Action Task Force (FATF) to accelerate the establishment of global standards for cryptocurrencies. This includes supporting Travel Rule implementation and managing emerging risks associated with Decentralized Finance (DeFi) agreements and peer-to-peer transactions.
Japan’s Early Adoption of Crypto and Strict Regulations Sets Global Standards
Recognizing the potential of cryptocurrencies early on, Japan became one of the first countries to legalize them as a form of property. In doing so, Japan has established itself as a pioneer in crypto, implementing some of the most stringent regulatory measures in the world, including Japan’s crypto-AML measures.
In response to major security breaches that have impacted exchanges like Mt.Gox and Coincheck, Japan’s financial regulator, the Financial Services Agency (FSA), has taken decisive action to tighten regulations governing crypto exchanges . These incidents prompted the FSA to improve and tighten the rules, with the aim of improving the security and resilience of the crypto ecosystem in Japan.
FSA Implements Safeguards for Client Protection in Crypto Exchanges
To ensure customer protection within the cryptocurrency ecosystem, the Financial Services Agency (FSA) of Japan has established several rules for exchanges. These measures include requiring exchanges to keep holdings separate from client and company assets, subject to verification through annual audits.
To mitigate risk, investors are prohibited from borrowing more than twice the value of their investments for leveraged trading on exchanges. Additionally, licensed crypto exchanges are required to store at least 95% of client funds in cold wallets, improving security and protecting assets held on the platform.
In April, the Web3 project team affiliated with Japan’s ruling Liberal Democratic Party released a comprehensive white paper outlining various strategies to foster the growth and expansion of the country’s cryptocurrency industry.
In conclusion, Japan is taking significant steps to strengthen its regulatory framework and combat money laundering in the cryptocurrency space. By implementing stricter anti-money laundering (AML) measures, Japan aims to ensure the integrity and stability of its financial system while promoting the growth of the digital asset industry. Enforcement of the “travel rule” and emphasis on customer identification, transaction monitoring and information sharing between exchanges and regulators demonstrates Japan’s commitment to transparency and responsibility.
Also Read: Binance Cleared of Tinder’s $8 Million “Pig Butchering” Lawsuit.
#Japan #Introduce #Stricter #AntiCrypto #Money #Laundering #Measures #June #crypto strategy