Japan plans to regulate virtual currency

In the wake of the arrest of former Mt. Gox CEO Mark Karpeles, Japan now plans to regulate virtual currency. This action is being driven by international calls to regulate virtual currency to prevent money laundering and terrorist financing, according to The Japan Times.

Japanese Finance Minister Taro Aso said the government would consider introducing a registration or licensing process for virtual currency exchanges, The Japan Times said. In addition, the Finance Ministry, the Financial Services Agency and the National Police Agency plan to work together to adjust Japan’s anti-money-laundering law to combat virtual currency laundering, the newspaper reported.

This recent development was influenced by a report by the Financial Action Task Force (FATF), an international anti-money-laundering body. The FATF’s “Guidance for a risk-based approach to virtual currencies” report calls for the registration and licensing of all virtual currency exchanges. It also calls for exchanges to confirm client identities and keep records of transactions.

Japanese Bitcoin exchange Mt. Gox collapsed in March 2014, after losing 850,000 bitcoins in a hacking attack. Mt. Gox later found 200,000 of the missing bitcoins.

For information on virtual currency regulation, see the Virtual Currency Today report “Regulation of Virtual Currencies: A Global Overview.”

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