By James Lawrence - News - 1 month ago

Japanese Police Agency Report 6,000 Cases of Suspected Money Laundering Linked to Crypto

Thursday 6, The Japan Times (JT) has reported that according to the National Police Agency (NPA), nearly 6,000 cases of suspected money laundering linked to cryptocurrency were reported to police in the January to October period.

According to JT, the figure is more than eight times higher than the 669 cases reported from April to December last year. While the increase is dramatic, the article ends with noting that there has been “346,139 suspected money laundering and other abuse cases were reported to the police in the January-October period” reported to NPA officials. These figure includes all financial transactions and mostly involve banks and other financial institutions.

The NPA suspect the dramatic rise in money laundering cases linked to crypto is due to increased requirements for cryptocurrency exchanges to report transactions they believe to be involved in money laundering. The law, preventing transferring criminal proceeds was revised in April last year.

“We have seen some large-scale cryptocurrency thefts, and operators are believed to be scrutinizing transactions more rigorously,” an official of the NPA said on the mandatory notification system.

Stated in unconfirmed reports earlier this year, the Yakuza, the largest Japanese organized crime syndicate, was able to launder nearly $300 million, between 2016 and May 2018. The month following the reports of the ring, the Japanese Financial Services Agency ordered bitFlyer, Inc. and five other cryptocurrency exchange operators to improve internal controls to combat money laundering, as also reported in the Japanese Times.

Despite these increased AML requirements, the National Public Safety Commission in their report today have pointed out “the vulnerability of cryptocurrency transactions to abuse.” The report mentions cryptocurrencies ability to quickly be transferred overseas and rapidly anonymized, make crypto transactions easy to criminalize and difficult to track, especially as regulations on the virtual currency are different in each country.

The report notes that KYC requirements are also lacking on exchanges as accounts were logged into from overseas even though account addresses were registered in Japan, and account photos and identifying documents were submitted by multiple users with while simultaneously inconsistent with names and birth dates.