Japan urges banks to screen crypto transfers in crackdown on ‘unlawful money transfers’

Japan’s Financial Services Agency (FSA) has proposed new measures to bolster user protection against illicit transactions to crypto exchange platforms, according to a Feb. 14 recommendation to Japanese banks.

The directive emphasized the need for banks to proactively protect their users from the risks attached to “unlawful money transfers” via “crypto-assets.”

Therefore, the regulator, in collaboration with the National Police Agency (NPA), made two key recommendations to the financial institutions. Firstly, the authorities proposed halting transfers to crypto exchanges if the sender’s name differs from the account holder’s.

“Stopping transfers to crypto-asset exchange service providers if the sender’s name is different from the account name.”

Secondly, the authorities advocated heightened vigilance in monitoring suspicious transactions on crypto platforms.

“Transaction monitoring related to transactions with crypto asset exchange companies, which are the points of exchange between crypto assets and legal currency, is an effective method for ensuring the effectiveness of risk reduction measures, so it is necessary to develop rules and scenarios for pattern analysis,” the NPA wrote.

The FSA continued that these measures would help to curb the persistent threat of specialized fraud cases, particularly those involving Internet banking.

Meanwhile, this initiative follows recent developments in the country, which has a history of maintaining strict crypto regulations. Last December, the Japanese government introduced tax reforms to cease the taxation of unrealized gains on digital assets held by corporations.

Russia laments spate of crypto frauds

Russia’s Central Bank reported an upsurge in crypto-related financial fraud activities last year.

According to a Google Translate of the report:

“The number of illegal participants in the financial market who use crypto-themes is growing. In 2022, every second pseudo-investment project attracted cryptocurrency. In 2023, almost all pyramid schemes and illegal brokers offered investments in internal tokens or accepted contributions in cryptocurrency.”

The report furthered that 1,500 scam projects accepted crypto donations to leverage the anonymity provided by blockchain technology.

The post Japan urges banks to screen crypto transfers in crackdown on ‘unlawful money transfers’ appeared first on CryptoSlate.