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The Japanese government is pondering enacting a new law. The “bundling bill” proposed by representatives would merge six different laws to prevent money laundering in the cryptocurrency sector.
The amended bill will strengthen Know Your Customer (KYC) requirements for crypto exchange businesses and raise money laundering fines for all organizations. The bill would be tabled for ratification at the current National Diet session.
As reported by the local press, the government would impose new remittance laws on virtual currency exchanges to counter money laundering. The bill also mandates that providers maintain the most updated list of individuals and organizations subject to fines.
The Japan Crypto Asset Exchange Association (JVCEA) has requested that its member businesses enact self-regulations in Japan. The country would also be allowed to freeze assets of the organizations as well as individuals.
In accordance with the new laws, cryptocurrency exchanges must reveal information, such as customer names and their residencies, during system transfers, and individuals who violate the rules may face penalties.
The adjustment focuses on transactions in which the funds are taken from the system, which helps with transaction tracking. Those found guilty of indulging in illicit activity may face punitive sanctions.
Japan considers the trade of digital assets to be a possible technique of money laundering given the popularity of crypto exchanges as well as mixers. The proposed modifications will therefore also apply to businesses that trade cryptocurrencies.
This decision was taken from the perspective of Japanese officials examining and lowering corporate tax rules for cryptocurrency companies commencing in 2023 in response to complaints and assertions that the rules are burdensome from lobbying groups for the sector. Despite all the laws governing cryptocurrencies, individuals cannot overlook the fact that the country’s government wants to extend the web3 domain to strengthen their economy.
Presently, Japan levies all cryptocurrency returns, both recognized and speculative, at a rate that ranges from 55% for individual investors to 30% for corporate investors. Information about the potential reduction in such tax rates was withheld by the government. According to the Japanese government, the Lazarus group from North Korea was behind years of crypto attacks.
Suggested Read: Japan to Form Specialized AML/CFT Team in Response to FATF Review