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HomeNewsJapan to Use Credit Evaluation To Curb Crypto-related Criminal Activities

Japan to Use Credit Evaluation To Curb Crypto-related Criminal Activities


The government of Japan has stated that largest credit agencies will appraise cryptocurrency users to stop the use of electronic assets in laundering money generated from illegal operations.

Credit bureaus, data security research companies, and Japan Credit Information Service will collaborate with the authorities to investigate questionable cryptocurrency trading accounts and people who exchange unusually considerable quantities of electronic assets starting in a couple weeks.

The decisions by the government follow several reports those came to light in past few months that have claimed that Yakuza, the biggest criminal syndicate in the country is using cryptocurrencies to launders millions of dollars regularly.

 The officials also stated that they will also target individuals that are suspected to be connected to terrorist organizations and criminal organizations on the basis of social media presence. The credit scores will also attract scrutiny and accounts in cryptocurrency exchanges owned by suspicious individuals and will be evaluated by four credit agencies and as well as financial authorities.

Yizumi Nobuhiko, the chairman of Japan Credit Information Service said:

“By providing the personal information of suspicious individuals including credit scores and financial data, the government hopes to protect investors and improve the security of the cryptocurrency industry.”

But to avoid the flow of personal data, the four charge bureaus won’t provide sensitive financial and personal data unless local fiscal authorities have an adequate basis to suspect specific entities and individuals to participate in a money laundering scheme or a crime syndicate.

As per reports on June 22, the Japanese government has arranged six (out of sixteen) exchanges accredited from the Japan Financial Services Agency (FSA) to reevaluate their Anti-Money Laundering (AML) and Know Your Client (KYC) system.

Brian Kelly, the founder of cryptocurrency hedge fund BKCM and CNBC Fast Money contributor, said that the initiation of an improvement process of internal management systems by Japanese exchanges will enable the local cryptocurrency market to evolve into a legitimate industry, which will be beneficial in the long run.


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