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Japan Tackles Crypto Crime With New Anti-Money Laundering Rules

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In a significant move to combat money laundering and enhance the transparency of crypto transactions, Japan has announced the enforcement of stricter anti-money laundering measures starting from June 1.

The decision by Japan’s Cabinet aims to align the country’s legal framework with global standards and address concerns raised by the Financial Action Task Force (FATF), an international financial watchdog.

Japan’s previous anti-money laundering efforts were deemed insufficient by the FATF, prompting the revision of relevant laws in December. The new measures reflect a growing focus on monitoring crypto assets that can be exploited for money laundering, where illicit funds are disguised as legitimate by routing them through legal transactions.

Reinforcing The Travel Rule for Enhanced Tracking

One key aspect of the new regulatory framework is the implementation of the “travel rule,” designed to improve the traceability of criminal proceeds. Under this rule, financial institutions facilitating crypto transfers are required to share customer information with the recipient institution.

The information includes the names and addresses of both the sender and the recipient, enabling better oversight and identification of potential money laundering activities.

The travel rule is particularly targeted at stablecoins and crypto pegged to traditional currencies or commodities. These types of digital assets have gained popularity due to their stability and wide acceptance of transactions. However, their potential misuse of illicit activities has raised concerns among regulatory bodies.

By enforcing the travel rule and enhancing information sharing,

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Author: Edyme

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