- The new law will allow law enforcers and judges to freeze digital assets used or acquired through illegal activities
- The legislative Council to give guidance on confiscation of the illegal digital assets
- Only licensed banks, registered money transfer agencies, and local trust organizations can distribute stablecoins
The Justice Ministry of Japan has its focus on the law revolving around the seizure of illegal crypto-related cases.
The 1999 Act on Punishment of Organized Crimes and Control of Proceeds of Crime will be modified. The modifications would allow the law enforcers and judges to capture any form of digital assets that are used or acquired through illegal activities such as money laundering.
The Justice Ministry will seek guidance from the legislative Council concerning the confiscation of illegally acquired assets.
The current legislation focuses on physical assets such as mobile assets, monetary claims, and supplies. Crypto however does not fall under any of these categories.
The TerraUSD collapse raises eyebrows
The collapse of the Terra Luna stablecoin lead to the loss of billions of investments in digital assets.
It is without a doubt that the Japanese authorities have their focus on protecting local investors from frauds that could see the loss of valuable amounts of investments.
The Justice Ministry takes action soon after the Japanese government passed a bill that prohibits non-banking institutions from giving out stablecoins.
The Japanese government aims to protect its citizens who are investors in the crypto space from viable risks
Japan’s parliament passed the bill on 3rd June 2022. The bill clarifies the legal status of stablecoins, addressing them as digital money.
The bill requires that stablecoins be linked to the yen or another legal tender and should also give holders the right to acquire them back at face value.
The passed law allows only licensed banks, money transfer agencies that have registered, and local trust organizations to develop and distribute stablecoins.
Japan in the lead in crypto adoption
The Japanese minister, Fumio Kishida, showed interest in the modification of the country’s legislation on crypto taxations.
The legislation’s modification will spur the growth of web3 and its relations.
In February, FTX, after acquiring a local crypto exchange, launched the Japan FTX to offer exchange services.
In an attempt to protect the Japanese investors, the Financial Service Agency ( FSA) has enforced tight regulations for the upcoming crypto exchanges.
FSA reported that it will introduce regulations governing stablecoin issuers in the coming months.
