Japan Updates Six Laws To Battle Crypto Money Laundering
- Six laws related to the Foreign Exchange Act are now revised in Japan. The bill calls for tougher punishments for crimes involving money laundering.
- Under the amended bill, cryptocurrency exchanges must validate data like the user’s name during platform transfers.
In an effort to control the cryptocurrency market, the Japanese government iconsideringut adding a new regulation. At a cabinet meeting on October 16, representatives discussed a “bundling bill,” which would combine six different laws to make it impossible for money to be laundered in the cryptocurrency market.
The amended bill will enlarge money laundering penalties for all institutions and tighten know-your-customer (KYC) regulations for cryptocurrency exchange businesses. During the current National Diet session, the bill will be presented for approval.
The government would introduce new remittance regulations to digital currency exchanges as a measure against money laundering, according to the local news. Additionally, the bill requires providers to ensure they have the most recent list of people and organisations facing sanctions.
The new regulations are anticipated to take effect on May 2023.
The Japan Crypto Asset Exchange Association (JVCEA) has further asked its member companies to implement self-regulation in Japan. Additionally, the country will be able to freeze the assets of groups and people the UN has identified as being involved in the spread of weapons of mass destruction, and penalties for crimes involving money laundering will be tougher.
The new amendments mandate that crypto exchanges share information,n including customer names and addresses, during platform transfers and may impose sanctions on those who break the rules.
The adjustment concentrates on transactions where the funds have been removed from the platform, aiding in transaction tracing. Punitive measures may be taken against those who are found guilty of engaging in illegal activities.
Japan views the trading of digital assets as a potential method of money laundering, given the widespread use of cryptocurrency exchanges and mixers. Therefore, businesses engaged in cryptocurrency trading will also be subject to the new revisions.
This choice was made in the context of Japanese officials reviewing and easing corporate tax regulations for cryptocurrency companies starting in 2023 in response to criticism and claims that the regulations are onerous from lobbying groups for the industry. Individuals cannot, nevertheless, dismiss the fact that the government wants to expand the web3 space to enhance their economy amid all the crypto-related regulations.
Currently, Japan taxes all realised and unrealized gains from cryptocurrency at a rate of up to 55% for individual investors and 30% for corporate investors. The government withheld information regarding how much these tax rates might be reduced.
Recently the Japanese government revealed The Lazarus group from North Korea was responsible for years of crypto hacks. It was stated that phishing was one of the most widely used attack vectors.