Japan Urging Banks to Screen Crypto Transactions to Counter ‘Unlawful Money Transfers’

Crypto News– Japan’s Financial Services Agency (FSA) has put forward new measures aimed at enhancing user protection against illicit transactions on crypto exchange platforms, as outlined in a recommendation to Japanese banks on February 14.

Japan Urging Banks to Screen Crypto Transactions to Counter ‘Unlawful Money Transfers’

The directive underscores the importance for banks to take proactive steps in shielding their users from the risks associated with “unlawful money transfers” involving “crypto-assets.”

In collaboration with the National Police Agency (NPA), the regulator proposed two key recommendations to financial institutions. Firstly, they suggested suspending transfers to crypto exchanges if the sender’s name differs from the account holder’s.

“Ceasing transfers to crypto-asset exchange service providers in cases where the sender’s name does not match the account name.”

Secondly, authorities urged for increased vigilance in monitoring suspicious transactions on crypto platforms.

“Monitoring transactions involving crypto asset exchange companies, which serve as the interface between crypto assets and legal currency, is an effective means to enhance risk mitigation measures. Therefore, it is necessary to establish rules and scenarios for pattern analysis,” the NPA stated.

The FSA elaborated that these measures would help mitigate the ongoing threat of specialized fraud cases, particularly those involving Internet banking.

This initiative comes amid recent developments in Japan, a country known for its stringent crypto regulations. In December, the Japanese government introduced tax reforms aimed at halting the taxation of unrealized gains on digital assets held by corporations.