Officials from Japan’s National Policy Agency say that they received about 6,000 cryptocurrency-related money-laundering reports from January to October 2018, according to a December 7 report from Japan Today. The number represents a significant increase over last year’s reported cases:
The figure is more than eight times higher than the 669 cases reported from April to December last year. Cryptocurrency exchange operators are required to report transactions suspected of involving money laundering after the law on prevention of transfer of criminal proceeds was revised in April 2017.
The increased reporting may not indicate a massive increase in money-laundering, however. One NPA official suggested that the rising number indicates that cryptocurrency exchanges are acclimating to the suspicious transaction notification system that went into effect in 2017. Thanks to that revised law, those exchanges are required to report suspected money-laundering.
The reported cases apparently involved a range of suspicious activities, including users with Japanese addresses logging into accounts from overseas and multiple users submitting the same photo when verifying their account identities.
While the increase in reported cases may seem dramatic, it’s important to note that suspected crypto money-laundering continues to pale in comparison to suspicious transactions involving more traditional institutions. The numbers suggest that less than 2% of reported money laundering cases involved cryptocurrency.
Including all financial transactions, 346,139 suspected money laundering and other abuse cases were reported to the police in the January-October period, with most of them involving banks and other financial institutions, according to the NPA officials.