Japan’s Financial Watchdog Cracks Down on Suspicious Crypto Transfers

Enhanced Monitoring to Curb Financial Crimes

Japan’s Financial Services Agency (FSA) has ordered financial institutions to tighten their monitoring of transfers to cryptocurrency exchanges. This move aims to prevent the use of digital currencies for illegal activities.

Concerns over Fraud and Money Laundering

According to a report by the National Police Agency, a significant portion of losses from specialized fraud and unlawful money transfers end up in the crypto ecosystem. The FSA believes that enhanced monitoring can help mitigate these risks.

Stricter Measures for User Protection

The FSA has advised financial institutions to strengthen user protection by:

  • Halting transfers where the sender’s name does not match the account name
  • Implementing comprehensive monitoring processes for suspicious transfers to crypto exchanges

Japan’s Balanced Crypto Regulatory Approach

Japan has a cautious but open approach to crypto regulation. While recognizing the potential of digital assets, the government aims to create a safe environment for their use.

Recent Developments

Despite the crackdown on suspicious transfers, Japan continues to embrace crypto innovation:

  • Startups can now raise funds through cryptocurrencies
  • The government has approved a tax reform that excludes corporations from paying tax on unrealized crypto gains held long-term