Japan sees huge rise in cryptocurrency money laundering cases in 2018

Japanese police have seen a 1,000% rise in money laundering cases involving the use of cryptocurrencies, according to local media

Money laundering in Japan has been rife over the past year, with the Japan Times reporting that more than 7,000 money laundering cases involving digital assets were reported to the police in 2018.

This marks a 1,000% rise from 2017, when just 669 cases were reported in a shorter period between April and December.

Among the 7,096 suspicious transactions, some of the suspects were found to be using the same ID photos despite using different names and dates of birth, while others had sent the transactions from overseas despite being registered as living in Japan.

In total, of the 417,465 cases of suspected money laundering that were reported to authorities, just 1.7% of them involved cryptocurrency.

Most of the reports, 346,014 in total, involved banks and major institutions, while 15,114 were processed through credit card companies.

The National Police Agency are planning to combat the rise in money laundering by training staff in data analysis as well as testing artificial intelligence technology, which will make illegal trades and illicit transactions easier to trace.

Japan has fallen victim to a number of sophisticated cryptocurrency heists in recent years, with the infamous Mt Gox hack seeing $433 million being stolen.

Last year, Tokyo-based exchange CoinCheck saw more than $500 million being siphoned out of its exchange by hackers. However, to its credit, it did refund customers in full.

The Financial Services Agency (FSA) responded by granting CoinCheck a license that would allow the facilitation of trades in Japan.

In June, the FSA told six cryptocurrency exchanges in Japan to improve internal controls on transactions, which means they would be forced to notify the authorities about any suspicious behaviour.

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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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