Japan Targets Bitcoin Exchanges for Money Laundering as G20 Looms

By CCN: Japan’s financial regulators are considering enacting new rules aimed at bitcoin exchanges as it steps up anti-money laundering countermeasures. This issue will also be raised at the forthcoming G20 Summit, which takes place in Osaka on June 28 and 29.

Specifically, the Financial Services Agency (FSA) is targeting crypto exchanges that don’t adequately confirm their clients’ identities or offer anonymous transactions, the Nikkei Asian Review reported.

Japan has recently been roiled by money-laundering and hacking scandals, in tandem with the rise of the crypto industry. To address this, the FSA will conduct a thorough inspection of Japan’s anti-money laundering protocols this fall.

G20 to Address International Crypto Regulations

In addition, world leaders are expected to discuss international regulations for cryptocurrencies at the G20 Summit next month, which Japan is hosting.

While China and South Korea have banned initial coin offerings, Japan still allows regulated ICOs. In 2017, Japan became the first country to require crypto exchanges to register with the FSA.

Currently, there are no uniform transnational cryptocurrency regulations, but the topic will be broached at the G20 Summit.

Cyberhackers love to target cryptocurrency exchanges. | Source: Nikkei Asian Review

UN: North Korea Has Stolen $571 Million in Crypto

As interest in bitcoin and the crypto industry have spiked around the world, cybercriminals have become more sophisticated.

In March 2019, experts warned the UN Security Council that North Korea had hacked at least five Asian crypto exchanges and stolen more than $571 million.

The experts warned that North Korea is stealing crypto in order to offset the financial hardships it’s suffering due to ongoing U.S. economic sanctions.

“Cyberattacks involving cryptocurrencies provide the Democratic People’s Republic of Korea with more ways to evade sanctions given that they are harder to trace, can be laundered many times, and are independent from government regulation.”

Cryptocurrency thefts allegedly executed by North Korean hackers. | Source: Group IB

Money-Laundering Crackdowns Around the World

Meanwhile, other countries are also cracking down on the use of crypto exchanges for money-laundering purposes.

In December 2018, the Dutch Central Bank unveiled new rules requiring crypto companies to get licenses before they can operate in the Netherlands. To qualify for a license, crypto companies must report “unusual transactions” and know who their customers are.

The Dutch Central Bank said the regulation was necessary because the decentralized, anonymous nature of the crypto market makes it a target for money launderers.

According to one investigation, more than $88 million was laundered over 46 cryptocurrency exchanges around the globe during the past two years.

Russia again delays Bitcoin regulations amid money-laundering concerns

Meanwhile, Russia has once again postponed the roll-out of crypto regulations amid concerns over the use of bitcoin to launder money, evade taxes, and fund terrorism.

Russia was expected to unveil cryptocurrency regulations in July 2019, but officials announced this week that is being delayed again. This is the second time in two years that the project was shelved.

As CCN reported, an official with the Russian Parliament also warned that bitcoin can undermine the government.

Specifically, Nikolay Arefyev, the deputy chairman of the State Duma committee on economic policy, claims bitcoin could lead to Russia’s collapse by triggering a mass-withdrawal of capital to offshore accounts.

Click here for a real-time bitcoin price chart.

This post was last modified on 06/06/2019 19:37

Samantha Chang @Samantha_Chang

Samantha Chang is a financial editor who writes about cryptocurrencies and business at CCN. She is a law school graduate and an alum of the University of Pennsylvania. Email her at schang121@juno.com or follow her on Twitter at Samantha_Chang.

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