Japan Takes Steps Forward: Tougher Anti-Money Laundering Rules for Crypto

Japan’s cabinet has approved revisions to six foreign-exchange laws, marking a significant move towards strengthening the regulatory framework for cryptocurrencies ¹. The new rules aim to enhance Japan’s Anti-Money Laundering (AML) measures in the crypto sector.

Strengthening Regulatory Framework

These new measures closely follow the government’s plan to introduce stricter regulations for remittances ². Japan’s Financial Services Agency (FSA) will spearhead the implementation of the AML regulations ³.

• Japanese government’s ongoing efforts to prevent illicit activities, such as money laundering and terrorist financing, within the crypto sector
• Bringing the regulatory framework in line with the recommendations of the Financial Action Task Force (FATF)

Identification Requirements

The new rules will impose tougher identification requirements for users of cryptocurrency exchanges:

• Thorough Know Your Customer (KYC) checks
• Verification of user identities before allowing them to trade cryptocurrencies

Transaction Monitoring Mechanisms

The new regulations will also require cryptocurrency exchanges to implement stricter transaction monitoring mechanisms:

• Reporting of any suspicious transactions to the relevant authorities
• Increased transparency and reducing the risk of money laundering and financial crimes

Global Trend

Japan is not alone in implementing stricter AML regulations for its crypto sector ⁴. Governments worldwide recognize the need for comprehensive regulatory frameworks to prevent financial crimes:

• Strengthening Japan’s position as a leading player in the global crypto market
• Ensuring the safety and security of the financial system