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According to Nikkei Asia, the Japanese government plans to introduce cryptocurrency remittance rules in May 2023 to track remittances by criminals. report September 27th.
According to reports, the government will amend the Act on Prevention of Transfer of Criminal Proceeds to crack down on money laundering via cryptocurrencies. A bill to amend the law will be submitted to the next Congress beginning on October 3rd. The law adds cryptocurrencies to the remittance rules known as travel rules.
According to the draft, when transferring cryptocurrencies between exchanges, exchange operators will have to share customer information such as names and addresses with each other. According to the Nikkei Asia report, the goal is to track the money transfers of criminals to identify when and where they sent cryptocurrencies.
Exchange operators will be subject to administrative guidance and correction orders if they violate the new rules. Violation of a rectification order can lead to criminal penalties, according to the report.
The new law will also apply to stablecoins, which will need to be registered for issuance from next year when the revised Payment Services Act comes into effect. Under the Payment Services Act, which was passed in June 2022, only trust companies, licensed banks, and registered money transfer operators can issue stablecoins.
The Japanese government also aims to revise two laws by May next year: the Foreign Exchange and Foreign Trade Law and the International Terrorist Asset Freeze Law. Both of these laws are related to money laundering.
Amendments to the Foreign Exchange and Foreign Trade Act add stablecoins to the list of regulated assets. The idea is to block the transfer of stablecoins to Russian and North Korean sanctioned targets.
Nikkei Asia reports that the Japanese government has imposed sanctions on groups involved in Iran’s and North Korea’s nuclear programs, but the International Terrorist Asset Freeze Act has so far failed to cover them. The Financial Action Task Force wanted to improve the law, believing it could be a loophole for funding nuclear development. The law change is expected to come into force by the end of the year, according to the report.
The Japanese government has designated those involved in North Korea and Iran’s nuclear development as sanctioned countries based on UN Security Council resolutions, but the International Terrorist Asset Freeze Act does not cover them. The FATF has called for improvements to the law, arguing that it could be a loophole for funding nuclear development.
