To Prevent Money Laundering, Japan’s Financial Regulator Is Pushing Crypto Exchanges To Drop ‘Altcoins’
To prevent money laundering and other criminal activities, the Japan Financial Services Agency is quietly pushing cryptocurrency exchanges to abandon the handling of Monero (XMR), Zcash (ZEC) and Dash(DASH) and other cryptocurrencies favored by criminals and hackers.
According to the Japanese authorities, it is very difficult, if not impossible to identify the recipients of Monero via a blockchain or any other public registry ledger. Anonymity makes the coins ideal for money laundering.
The FSA claims that these cryptocurrencies, which are much harder to track than Bitcoin (though in some cases still possible, due to user error and other factors),have become too closely linked with the criminal underworld.
After Coincheck’s hack on 26 January, the FSA intensified its inspections of all recorded cryptocurrency trades. The FSA has also identified a number of other areas of application that may be detrimental to obtaining approval.
Before its hack on January 26, Coincheck handled cryptocurrencies such as Monero, Ethereum and Zcash. Criminals, who were some of the earliest adopters of Bitcoin, have increasingly dropped that cryptocurrency for transactions in favor of Monero and other less traceable “altcoins.” After suspending operations and fully returning to business, Coincheck stopped handling all three currencies.
At present, there is no official prohibition on trading or facilitating the trading of anonymous cryptocurrencies. Nevertheless, the FSA’s war on privacy-centric altcoins appears to be having some success.
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