G20 To Focus On Crypto AML, ‘Too Stringent Regulations’ Not Good, Says Japanese Gov’t Official

Japan will call on the G20 member governments to concentrate on developing a common anti-money laundering (AML) strategy for cryptocurrencies during the annual summit in Buenos Aires on March 19-20, Reuters reports March 13, quoting a “government official with direct knowledge of the matter.”

Japan’s government official told Reuters that at the moment the country’s government thinks it is better to focus on development of measures preventing AML instead of formulating regulations for cryptocurrency trading.

The official stressed the fact that the “loophole” for money laundering still exists because some governments are enforcing weaker regulations than the others.

“Discussions will focus on anti-money laundering steps and consumer protection, rather than how cryptocurrency trading could affect the banking system,” the official said, adding that the overall mood at G20, at this point, is that “applying too stringent regulations won’t be good.”

According to Reuters, the Financial Action Task Force (FATF), a 37-nation body working on standards to prevent money laundering, will prepare a report for the G20 meeting on ways of combating digital currency money laundering.

On Feb. 23, Japanese cryptocurrency exchanges reported that 669 suspected money laundering cases have taken place in 2017, only a fraction of the 347,000 instances reported by the country’s banks for the same period.

In mid-February Japan’s Financial Services Agency (FSA) announced the inspections of 15 cryptocurrency exchanges, which followed the Coincheck hack on Jan. 26. Last week, FSA issued ‘Punishment Notes’ for 7 crypto exchanges, and halted work of two more.