Japan’s National Police Agency Reports 10x Increase in Crypto Laundering
On Thursday, the National Police Agency (NPA) of Japan reported that more than 7,000 cases of suspected money laundering related to cryptocurrencies were reported to the Japanese Police in 2018.
During the period of April and December in 2017, when the authorities made it mandatory for cryptocurrency exchange operators to report transactions that are suspected to be linked to criminal activity, 669 cases were reported.
In comparison to 669 cases in a relatively shorter period of 2017, this marks a 10x increase in crypto linked money laundering cases. The police also shared that in some cases, the virtual currencies were used to pay for illegal drugs and child pornography.
Among these 7,096 suspicious transactions, some users with different birth dates and names shared the same identification photo. In some cases, users have logged into their accounts from overseas while their addresses were in Japan.
9% Of Japan’s 417,465 Money Laundering Cases Involve Crypto
In a total of all financial transactions, 417,465 were suspected money laundering cases and other abuse cases that were reported to the police in 2018. Most of these cases involved banks and financial institutions that made up 346,014 reports in total followed by 15,114 cases reported by credit card companies.
Only 9 percent of the total money laundering cases linked to cryptocurrencies. While crypto laundering cases saw a 10 fold increase, money laundering cases in itself have gone up 17,422 from a year earlier.
The NPA provided information on 8,259 cases to the investigating authorities that result in the police handling 1,124 cases.
In order to counter the rising number of suspicious transactions, South China Morning Post reports,
“the NPA plans to develop specialists in data analysis as well as testing artificial intelligence technology tasked with detecting illegal trades by teaching AI to recognize patterns related to the drug dealers and money laundering transactions.”
In recent years, Japan saw a number of big heists related to cryptocurrency amidst a tremendous interest among people regarding digital currencies. One of the biggest hack, Mt. Gox resulted in the loss of 48 billion yen worth of Bitcoin in 2014. The defunct exchange is currently having plans for a revival.
After this, last year in January, about 58 billion yen worth of NEM were stolen from Tokyo-based crypto exchange Coincheck. Due to these big losses, in June, the Financial Services Agency (FSA) took measure against money laundering and ordered the exchange operators to improve their internal controls.