The regulatory framework globally pertaining to cryptocurrencies is not that strong. That is why Japanese authorities are finding it difficult to curb money laundering with the help of cryptocurrency networks. Mainichi Shimbun recently confirmed that in a single case, ¥ 30 billion was transferred through various cryptocurrency transactions in 2016 alone. The organized Japanese groups are using the cryptocurrency operations for money laundering.
Even though the Japanese authorities are currently strengthening their regulatory frameworks but these are limited within the boundaries of the country. It is easy to use cryptocurrencies in order to transfer money outside. That is why Japanese authorities are seeking cooperation from other regulatory authorities globally in order to curb money-laundering.
There are dedicated places in Japan where individuals can meet and discuss transactions in cryptocurrencies. These are controlled groups and information about them does not come out to the public. This is fuelling the trend of using cryptocurrencies for illegal activities.
According to a gang member, there are no problems in dealing with cryptocurrencies. Plenty of cryptocurrencies are difficult to trace. Some of these cryptocurrencies include Zcash, Dash, and Monero. The huge amount of money which is being laundered all over the world poses a serious threat to the Japanese economy. Moreover, cryptocurrency transactions can be easily scaled up. This ensures that in the future, the amount of money which can be laundered is even higher. According to a gang member, they initiated hundreds of different transfers in order to ensure that they did not garner any attention. That is why it took so long for the authorities to actually figure out that these transactions are actually related to money-laundering. Moreover, most of the Japanese exchanges have only recently started gathering information, about the account holders.
Earlier, it was very easy to just open the cryptocurrency exchange accounts and conduct the transactions. Only now, the financial services agency of Japan has created proper regulations to gather documents as well as more proofs from the cryptocurrency exchange account holders in order to prevent money laundering.
However, without the active cooperation from other countries, it will be very difficult for Japanese authorities to actually curb money-laundering.
Also, the G-20 in March this year also announced that it will improve the cryptocurrency framework globally in order to stop money-laundering. However, it will take a long period of time before any of these rules actually see the light of the day. Till then, it will be a field day for the criminals using cryptocurrency for money laundering.
