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Suspicious Crypto Trading Reports on The Rise in Japan


According to Japanese law enforcement officials, cryptocurrency money laundering constitutes only a minor portion of the total case of money laundering in the country. However, the National Police Agency of Japan says that between January and October 2018, there were 5,944 reports from cryptocurrency exchanges regarding suspicious crypto transactions, most of which are suspected to be related to either tax evasion or money laundering.

According to figures recorded by Jiji Press, last year there were only 699 cases of suspicious crypto transactions that were reported. This year, the number has increased eight-fold which according to the National Police Agency, is proof that the exchanges and operators have begun to take their reporting obligations even more seriously. Things have not gotten any better though. While over 660 million yen was stolen from crypto exchanges and individual wallets in 2017, the figures increased to a whopping 60 billion yen in just the first half of 2018. In the wake of these alarming discoveries, the authorities implemented new rules in 2018 – these required that operators identify all their customers and report any and every suspicious transaction as soon as they are detected.

While the numbers are certainly very significant, Japan’s National Police Agency said that the figures are relatively small when compared to the total number of all the other non-crypto related cases of money laundering. The report issued by the agency revealed that there were over 340,000 cases of money laundering across the country’s financial sectors during the period under review – based on the report, crypto-related money laundering only accounted for two percent of the financial crimes that were reported.

Two Percent Is Still Too High

For cryptocurrency investors and enthusiasts, 2 percent is another way of proving wrong claims by critics who see digital currencies as a playground for criminal elements. Apparently, criminals still prefer old-fashioned methods – banks – to crypto. Still, the law country’s law enforcement is not going to be backing down from their regulatory efforts. Already, the Financial Services Agency (FSA) has implemented some firm regulatory guidelines that included a move to regulate custodial virtual currency wallet providers. This was part of the country’s 2018 plan to strengthen various elements of cryptocurrency regulation within its borders.

By October 1, the FSA had already registered 16 cryptocurrency operators with three more still undergoing the screening process. More recently, the National Public Safety Commission has also released a report detailing the transfer of criminal proceeds, emphasizing how susceptible crypto transactions are to abuse. The commission’s investigations into suspicious digital currency transactions also pointed out some potential red flags including the reuse of the same photo and the creation of multiple trading accounts from a single IP address. Hopefully, these will be enough to help bring back some level of trust in the crypto industry.

Lee Jenkins

Lee is our resident cryptocurrency expert who knows the ins and outs of each coin and the blockchain technology behind them. You’ll find that most of our technical guides are written or overseen by Lee and they are all easily digestible by the new and experienced alike, so there is no better place to learn blockchain 101 than here. Occasionally you may see a news article from him if it’s tech related!