Nearly 6,000 cases of suspected money laundering, all linked to cryptocurrencies, has been reported to Japanese police between January and October this year.
On the Increase
Amazingly, the figure is eight times higher than the 669 cases that were reported between April and December last year. An NPA (National Police Agency) official attributed the rising number of reports partly to operators becoming used to the notification system.
“We have seen some large-scale cryptocurrency thefts, and operators are believed to be scrutinizing transactions more rigorously,”
Despite assurances by cryptocurrency figureheads, such news stories do little to assure potential industry investment that the technology isn’t rife for abuse and criminality. Whilst public ledger-based cryptocurrencies create highly-tractable transactions, lack of legal oversight and robust KYC surrounding the exchanges these tokens are trading on is proving problematic.
“Bitcoin is not above the law, nor is it a magnet for illicit transactions: it forms only a tiny part of the criminal money circulating around the planet” – Quebec’s Chief Scientist Rémi Quirion
Don’t forget, the USD is still the preferred currency of criminals around the world.
— Pomp 🌪 (@APompliano) 18 April 2018
Moreover, the transactional velocity of many digital coins, such as NANO, XLM, and XRP, means that it’s possible to move money overseas very quickly. Among the suspicious transactions reported to the police, the commission’s report said some users logged into their accounts from overseas even though their addresses were in Japan. The report also said the same photo was used in identity verification documents submitted by multiple users with different names and birth dates.
A case investigated by the police in relation to money laundering found that an undisclosed foreign visitor to Japan was found to have sold a cryptocurrency account ID and password to an anonymous user. However, the context of the 6000 reported cryptocurrency money laundering cases is important. A total of 346,139 suspected money laundering and other financial abuse cases were reported to the police in the January-October period, with most of them involving banks and other financial institutions. Digital currencies, therefore, represented only 1.733% of total cases.
Despite the potential to abuse the technological advantages, and lax KYC measures of some exchanges, cryptocurrencies offer a significantly more open and transparent means of transferring value – with fiat still the number one choice for criminal activity.Leave a comment