The Japanese authorities plan to revise “The Act on Prevention of Transfer of Criminal Proceeds” to require exchanges to provide user data when sending crypto to another exchange, according to Nikkei Asia. The amendment is expected to be submitted to a parliamentary session in October, with the rules scheduled to take effect in May 2023.
The Japanese government plans to introduce cryptocurrency transfer rules in May 2023 to track money transfers by criminals, according to a Nikkei Asia report on September 27. The authorities will present the law amendment before Parliament at the next session, which begins October 3. The law will add cryptocurrency to the money transfer rules known as travel rules.
The Act on Prevention of Transfer of Criminal Proceeds will be revised to require the sharing of customer information between exchange operators. The move aims at money transfers by people engaged in illegal activities.
The government will also make amendments to two other laws, The Foreign Exchange and Foreign Trade Act and the International Terrorist Asset-Freezing A,ct to reflect the same changes, which will go into effect in May 2023. The amendment foresees the issuance of “administrative guidance and corrective orders” to exchanges that break the new rules, with criminal penalties for violations of the corrective measures.
The Foreign Exchange and Foreign Trade Act amendments will add stablecoins to the list of regulated assets. The aim is to stop the transfer of stablecoins to sanctioned targets in Russia and North Korea.
According to the Nikkei Asia report, although the Japanese government sanctioned parties involved in nuclear development in Iran and North Korea, the International Terrorist Asset-Freezing Act did not cover them before. The Financial Action Task Force (FATF) requested improvements to the law, believing it could serve as a slip for funding nuclear development. The report also states that the law amendments may come into effect by the end of the year.