Cases of money laundering linked to cryptocurrency in Japan up tenfold in 2018

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Market & Investment
Foreign Exchange & Interest Rate
Mar 01, 2019
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Over 7,000 cases of suspected money laundering linked to cryptocurrencies were reported to police in 2018, the National Police Agency said Thursday.

The figure jumped more than tenfold from the 669 cases reported in a shorter period between April and December in 2017, when it became mandatory for cryptocurrency exchange operators to report transactions suspected to be linked to the movement of illegally obtained cash.

Cryptocurrency can be transferred quickly and largely anonymously, with police saying that in some cases virtual currency was used to pay for illegal drugs or child pornography.

Among the 7,096 suspicious transactions, some users with different names and birth dates shared the same ID photo, while others appeared to log into their accounts from overseas even though their listed addresses were in Japan.

Including all financial transactions, 417,465 cases of suspected money laundering or other abuse were reported to the police in 2018, up 17,422 from a year earlier. Most of them involved banks and other financial institutions, which made 346,014 reports in total, followed by credit card companies, with 15,114 cases reported.

After analyzing the reports, the NPA provided information on 8,259 cases to investigating authorities, up 1,096 from a year earlier. As a result, police handled 1,124 cases, mainly involving fraud.

To counter the rising number of suspicious transactions, the NPA plans to train specialists in data analysis as well as test artificial intelligence technology that will be able to detect illegal trades after being taught to recognize patterns related to drug deals and money laundering transactions.

Japan has seen large digital currency heists in recent years amid a rise in the number of people purchasing the various currencies.

In 2014, ¥48 billion ($433 million) worth of bitcoin was stolen from the now-defunct cryptocurrency exchange Mt. Gox. In January last year about ¥58 billion worth of the digital currency NEM was taken from customers’ accounts at Tokyo-based bourse operator Coincheck Inc.

In June, the Financial Services Agency, which regulates cryptocurrencies in Japan, ordered six virtual currency exchange operators to improve internal controls, including taking measures against money laundering.

Source: https://www.japantimes.co.jp/news/2019/02/28/national/crime-legal/cases-money-laundering-linked-cryptocurrency-japan-tenfold-2018/#.XHiEzIgzbIU