The Japanese Ministry of Justice wants to grant judges and police officers the right to collect cryptoassets in criminal cases, potentially allowing the government to grab tokens used in money laundering schemes.
The government seeks to alter the Act on Punishment of Organized Crimes and Control of Proceeds of Crime (1999), which allows law enforcement agencies to seize “real estate, movable goods, and monetary receivables,” according to the Yomiuri Shimbun.
However, the legislation now prohibits officers from seizing intangible digital assets, albeit it does allow them to access bank accounts and cash reserves.
However, the Ministry of Justice will have to overcome a number of legal hurdles before it can proceed. It will first need to make arrangements to bring the issue to the Legislative Council, which is made up of civil and criminal law specialists. It will also have to work out the practical and technical specifics of the proposed change, including as how courts and police officials should handle taking private keys from wallet owners.
After that, the idea must be approved by the cabinet and subsequently by parliament. However, all of these steps are likely to be merely ceremonial, and the modification will almost certainly be bundled with other measures.
The government also wants broader authority to take action against suspected hackers or those in charge of tokens seized in cyber-attacks.
The prosecutor’s office officer was cited as saying:
- “To ensure confiscation can be carried out effectively [in criminal cases,] the necessary legislative steps must be taken.”
Japanese politicians are adamant on closing any gaps in crypto regulation, which is becoming increasingly comprehensive in the country. More anti-money laundering provisions were added to updated fund settlement regulations addressing cryptoasset and stablecoin issuance in Japan late last week.
The regulation, which will take effect in less than a year, restricts the issuance of cryptocurrencies and stablecoins to banks and other authorized financial entities.
