TOKYO - Japan's Cabinet decided Tuesday to enforce stricter anti-money laundering measures from June 1 to trace cryptocurrency asset transactions, bringing its legal framework in line with global standards.
Japan revised relevant laws in December after its anti-money laundering steps were deemed insufficient by the Financial Action Task Force, an international standard-setting financial watchdog.
Oversight organizations have been strengthening their monitoring of crypto assets that can be used to launder money, an activity in which money obtained from illegal activities is made to look legitimate by processing it through legal transactions.
A key feature of the new framework is the enforcement of the so-called travel rule to better keep track of criminal proceeds.
The rule requires a financial institution processing a crypto asset transfer to pass on customer information to the next institution and the information should include the names and addresses of the sender and recipient.
The targeted crypto assets include stablecoins or cryptocurrencies that are pegged to a currency like the U.S. dollar or a commodity.
If violators do not comply with corrective orders by authorities, they will face criminal punishment.