Japan intends to monitor suspected crypto trading activity and accounts by using credit information and social media IDs from users. According to reports, the Japan Credit Information Service, four credit agencies, and information security research firms will collaborate to track suspicious account activity of institutions and individual traders in cryptocurrency markets, such as large deposits or withdrawals that have the potential to move markets. In the coming weeks, the strategy should be operational. Only Japanese citizens and foreign nationals living in Japan are allowed to trade on major cryptocurrency exchanges.
“The government hopes to protect investors and improve the security of the cryptocurrency industry by providing personal information of suspicious individuals, including credit scores and financial data,” said Yizumi Nobuhiko, chair of the Japan Credit Information Service, to NHK, Japan’s national public broadcaster. Credit bureaus, on the other hand, will not exchange personal information on people or businesses who aren’t accused of criminal activity.
The Crypto Ecosystem Is Being Revitalized
Japan’s recent step is part of a larger push to clean up the bitcoin market. In February, a huge theft at Coincheck, a cryptocurrency exchange, exposed the lack of security procedures at cryptocurrency exchanges in the country.
According to recent reports, the CIA believes that the Yakuza, a Japanese crime group, is laundering money abroad using cryptocurrencies. As a result, the country’s Financial Services Authority (FSA) has began examining crypto exchanges more closely and has required improvements to their operations. The Financial Services Authority (FSA) of the country ordered cryptocurrency exchanges to tighten up their efforts to combat money laundering last week.
Japan has the biggest cryptocurrency trading volumes in the world, surpassing South Korea and the United States. While retail investors make up the bulk of its traders, the number of persons who have big cryptocurrencies investments has grown over time. According to the most recent data, at least 331 Japanese residents earned 100 million yen ($910,000) via bitcoin trading in the previous fiscal year.