Japan’s Ministry of Justice intends to amend its asset forfeiture law to allow law enforcement to seize cryptocurrencies associated with criminal activity.
According to local media, the Japanese authorities are about to revise the Organized Crime and Proceeds of Crime Control Act of 1999. A provision will be added to it explaining in which cases crypto assets can be confiscated. This will allow law enforcement agencies and courts to take control of digital assets stolen from other users or involved in money laundering.
The current version of the law on the confiscation of assets derived from organized crime does not prescribe any measures in relation to illegally obtained cryptocurrencies. Only physical property, cash, vehicles, and inventory can be confiscated, and cryptocurrencies do not fall into any of these categories. The authorities fear that criminals will continue to use crypto assets to commit illegal acts.
Therefore, as early as next month, the Japanese Ministry of Justice will hold talks with the Legislative Council to discuss nuances, such as how the police will be able to obtain the private keys of criminals. For an amendment to take effect, it must be approved by the Cabinet of Ministers and then signed by Parliament.
The proposal comes days after Japan passed a bill to regulate stablecoins, which would only allow them to be issued by licensed banking institutions. The authorities made this decision to reduce systemic risks and protect consumer rights.
Recall that from April 1, Japanese cryptocurrency exchanges are required to identify their customers and send reports to regulators in order to comply with the rules of the Financial Action Task Force on Money Laundering (FATF).
