Reported Cases of Crypto-Related Money Laundering Increase 10-Fold in 2018
More than 7,000 cases of suspected money laundering tied to crypto were reported to Japanese police in 2018, a more than tenfold increase from the 669 cases over a nine month period during the previous year. The news was reported on Feb. 28 by local English-language daily The Japan Times.
In 2017, just 669 cases were reported over a nine month period through December 2017, after new rules taking effect in April 2017 made it mandatory for crypto exchange operators to report transactions suspected to be tied to the movement of illicit funds. The twelve months and 7,096 cases in 2018 thus represent a 960 percent increase over the data for the nine month period in 2017.
According to the Japan Times, the more than 7,000 suspect transactions betrayed various red flags — such as being linked to user accounts held under different names and birth dates, but with an identical ID photo. In other sign, logins from accounts registered in Japan were identified as coming from overseas.
The rise in crypto-specific cases comes against a backdrop of a 2,296 percent increase in all cases of suspected money laundering. In 2018, there were 417,465 reported cases — up from just 17,422 in 2017. The lion’s share of cases reported in 2018 involved banks, which reported 346,014 cases, followed by credit card firms, with 15,114 cases.
In light of the rising statistics, the NPA reportedly plans to train experts in data analysis and pilot artificial intelligence technology that would expedite the detection of patterns related to suspected money laundering and other illicit transactions.
As Cointelegraph has reported, two high-profile scandals involving Japanese crypto exchanges — January 2018’s unprecedented $532 mln Coincheck hack and the infamous collapse of Tokyo-based Mt. Gox — have led to intensified interventions from the country’s financial watchdog, the Financial Services Agency (FSA).
Since April 2017, Japan’s Payment Services Act has required all crypto exchanges to be registered under an FSA license, with the first licenses being approved in September of that year. The watchog further tightened stipulations in 2018, continuing to focus on demanding robust Anti-Money Laundering and Know Your Customer compliance.