Will a new Japanese law allow seizure of your crypto?

According to reports, Japan’s Justice Ministry is considering revising an asset seizure statute connected to organized crime. This is expected to include a provision allowing crypto to be hijacked in such cases.

A possible modification of the Act on Organized Crimes and the Control of Proceeds of Crime (1999) would allow law enforcement authorities and judges to seize crypto-assets used in illegal activities such as money laundering.

At the moment, the law governing the punishment of organized crime does not specify how to deal with crypto-assets obtained unlawfully. Criminal groups may take advantage of this and use cryptocurrency to launder money and commit other crimes.

Justice Ministry to convince the Legislative Council

To ensure that all criminal assets are confiscated, the ministry will seek an opinion from the Legislative Council. The latter will advise the Justice minister, as soon as this month. Following the same, they will begin extensive discussions to change the law. 

Since the specific law focuses on the seizure of funds/assets from organized crime, it does not explicitly outline any procedure regarding illegally acquired cryptocurrencies. There is concern that criminals may be able to continue their illicit behavior through their unseized digital asset holdings.

Physical property, monetary claims, and mobile assets such as machinery, cars, tools, and supplies are the only assets that can be confiscated under current legislation. Crypto, however, falls under none of those categories.

The research comes just days after the Japanese government issued legislation preventing non-banking businesses from producing stablecoins. This, an effort to reduce system risk and increase consumer safety.

The measure allows only licensed banks, registered money transfer agencies, and local trust organizations to develop and issue stablecoins.

Following last month’s shocking collapse of TerraUSD, Japan took action as part of a five-year commitment to protect consumers investing in cryptocurrencies.

Japan’s relationship with crypto is…

Japan’s relations with the crypto-industry have not been bad so far. To spur Web3-related growth, Japanese Prime Minister Fumio Kishida stated that he may be open to modifying the country’s much-maligned crypto-tax legislation.

FTX has also opened FTX Japan to serve its Japanese customers after acquiring a local crypto-exchange in February.

Japan’s Financial Services Agency (FSA) has strict requirements for crypto-exchanges intending to operate there. In fact, the commissioner of the country’s crypto-regulator has admitted that it makes things “extremely difficult” for exchanges.