The Japanese government has agreed Cabinet decision to amend laws regulating digital asset service providers to suppress money laundering incidents.
According to a local publication, six laws related to the foreign exchange law have been revised to align with the country’s tough stance on money laundering. One of the key review points includes tougher penalties for companies and individuals involved in violating anti-money laundering (AML) rules.
To discourage this from happening, law enforcement agencies have been overburdened with the power to freeze the assets of defaulters, while service providers in the digital asset industry have been ordered to increase customer monitoring of their platforms.
Under the new monitoring system, Japanese virtual asset firms must “obtain information on the recipient’s address and information on the purpose of the transaction.”
The Cabinet’s decision to impose stricter regulation against money laundering was first highlighted in a Nikkei Report In September, which predicted that the government was planning to amend the Criminal Proceeds Transfer Prevention Act to prevent the use of digital currencies from circumventing national financial laws.
Local exchanges seem to have accepted the new system of regulations, with Coincheck and GMO Coin already implementing the policy for their clients. Other exchanges in the country appear to be on the same path, with the Japan Asset Exchange Association (JVCEA) issuing a directive for its members to follow the latest rules.
Coinpost reports that the revised laws will be brought forward to the current parliamentary session, with experts anticipating minimal obstacles from lawmakers.
Anti-money laundering rules tighten, but companies still flock to Japan
Japan’s strict anti-money laundering rules have done little to dampen enthusiasm service providers Looking to set up operations in the country. Binance, the world’s largest exchange, has received regulatory approval to return to the country after a Four years of absence.
Crypto.com and FTX are part of a string of foreign companies that have won approval to set up shop in Japan as the country relaxes its stance on virtual currencies.
The Financial Services Agency (FSA) remains scrupulous in screening companies looking to operate within the country’s borders, with CEO FTX Sam Bankman Fried Noting that “Japan is a highly regulated market with a potential market size of close to $1 trillion.”
The decision to tighten anti-money laundering measures is a direct result of routing Issued by the Financial Action Task Force (FATF), the world’s financial watchdog. The FATF’s travel rule requires virtual asset service providers (VASPs) to “share relevant origin and beneficiary information along with virtual asset transactions,” which Japanese regulators hope to fully implement.
Watch: BSV Global Blockchain Convention Committee, Law & Order: Regulatory Compliance for Blockchain and Digital Assets
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