Although 2018 was home to an influx of regulatory action, it also saw an increase in crypto-related suspicious activities. Japan reportedly saw a major influx in crypto associated money laundering in 2018.
Increased nefarious totals
Last year, the National Police Agency (NPA) received more than 7,000 reported instances of suspected money laundering affiliated with cryptocurrencies, as reported by the Japan Times in a February 28th 2019 article.
April through December of 2017 only saw 669 of such reported events, the outlet said: “when it became mandatory for cryptocurrency exchange operators to report transactions suspected to be linked to the movement of illegally obtained cash.”
In total, the media outlet presented 7,096 fishy events which included instances of IDs with multiple names associated, as well as users accessing their accounts from countries other than their posted Japanese addresses.
As a whole, 2018 saw a 17,422 increase in overall reported claims of alleged money laundering (and other negative) activities, the Japan Times explained. A total of 417,465 events caught the attention of Japanese police last year. The brunt of such events related to financial institutions, equating to 346,014 of the stated cases.
The Japan Times added, “after analyzing the reports, the NPA provided information on 8,259 cases to investigating authorities, up 1,096 from a year earlier. As a result, police handled 1,124 cases, mainly involving fraud.”
In response to the increased totals, the agency looks to up its game in the technology department, preparing and utilizing experts and artificial intelligence (AI) to better (and more efficiently) identify suspicious activities.
Not as anonymous as publicly thought
Contrary to popular sentiment, bitcoin, and other crypto asset usage, is not necessarily anonymous or private. Bitcoin transactions, for example, are all recorded on a public ledger. Each transaction is traceable. Therefore, criminals seeking refuge behind bitcoin might see their identities traced back to them. This is unlike most cash usage, which is more anonymous and less traceable.
A 2016 article from Sciencemag.org explained:
The past and present ownership of every Bitcoin—in fact every 10-millionth of a Bitcoin—is dutifully recorded in the “blockchain,” an ever-growing public ledger shared across the Internet. What remains hidden are the true identities of the Bitcoin owners: Instead of submitting their names, users create a code that serves as their digital signature in the blockchain.”
Although the stated bitcoin holders’ identities are hidden on a surface level, it doesn’t necessarily mean later transactions won’t reveal those identities, especially if traced to a fiat currency gateway with know-your-customer (KYC) laws.
Sciencemag continued, “Even in the strange new world of Bitcoin, FBI Assistant General Counsel Brett Nigh said in September 2015, ‘investigators can follow the money.’”