Japanese Cryptocurrency Exchanges Reported 6,000 Suspicious Transactions

Cryptocurrency money laundering cases reported to the Japanese police grew 800% in the first ten months of the year.

The National Police Agency in Japan registered nearly 6,000 suspicious cryptocurrency transactions in the period from January to October 2018, according to the latest report cited by the local media outlet The Japanese Times.

This figure reflects an 800% increase over the 669 cases reported from April to December in 2017.

While the numbers are shocking, the National Police Agency believes that the growth is caused mainly by technical factors. In April 2017, the Japanese authorities revised the law on the prevention of the transfer of criminal proceeds and demanded from that cryptocurrency exchange operators report on suspicious transactions that might be involved in money-laundering or other illegal activities. As companies are getting used to the notification system and learn to detect suspicious activity, the number of reported cases is growing.

 “We have seen some large-scale cryptocurrency thefts, and operators are believed to be scrutinizing transactions more rigorously,” the official said.

Red flags

In a separate report, the Japanese National Public Safety Commission emphasized that cryptocurrency transactions can be used by criminals to transfer the proceeds obtained from illegal sources. The anonymous nature of some coins and inability to trace senders and receivers allows for transferring money overseas and covering up the tracks.

The officials explained that it is difficult to track criminal proceeds transacted in the form of digital assets as there are no universal regulatory rules and requirements applied to virtual currency.

The police suggest paying attention to transactions performed by users who log in to their account from overseas even though they reside in Japan. Another potential red flag is the similarity of photos in identity verification documents submitted by different users with different names and birth dates.

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