Japan May Revise Law to Seize Illegally Gained Crypto Assets

Tokyo, June 6 (Jiji Press)--Japan's Justice Ministry is considering revising a law targeting organized crimes to clearly stipulate that crypto assets illegally acquired by criminal organizations and others are subject to confiscation. At present, the law on the punishment of organized crimes does not stipulate how to handle illegally acquired crypto assets. Criminal organizations may take advantage of this and use crypto assets for money laundering and other crimes. In order to ensure confiscation of all criminal assets, the ministry will ask for an opinion from the Legislative Council, which advises the justice minister, as early as this month and begin detailed talks to revise the law. Under the current law, the types of assets that can be confiscated are real property, movables and monetary claims. Crypto assets are not physical objects. They are considered not to fall under the category of monetary claim either, as they are not backed by a country or a central bank and issuers often cannot be identified. Therefore, if a criminal organization obtains crypto assets through cybercrime or converts money it obtained illegally into crypto assets, "we may not be able to fully confiscate them under the current law," a senior ministry official said. Of all suspected money laundering transactions reported by financial institutions and others in 2021, those related to crypto asset exchange service providers totaled 13,540, up 5,517 from 2020, according to National Police Agency data. Japan faces the urgent need to strengthen measures to tackle money laundering that uses digital technologies. In a report released in August last year, the Financial Action Task Force, a global body that oversees countries' efforts to crack down on money laundering, said that Japan's measures were insufficient. In February this year, the Legislative Council recommended the justice minister to increase the statutory penalty for money laundering under the law on the punishment of organized crimes. A member of the council said that necessary legislative action should be taken to ensure that illegally obtained crypto assets can be confiscated entirely. END