Since the very first time that cryptocurrencies were massively adopted in Japan, a massive jump in illegal and crime-related transactions was noted. In most cases, the transactions were made to settle extortions or make some purchases on the dark web. Thanks to the fact that cryptocurrencies are able to retain the user’s anonymity, pretty much anyone and everyone was able to purchase illegal commodities without the authorities even getting a sniff of it.

However, pretty much like anything else, once something becomes massively abused, it is going to generate attention. The Japanese justice system even forced Crypto exchanges to disclose information to local authorities about suspicious transactions.

According to the Japanese police, a little more than 7,000 cases were found where the transactions had a very strange nature. What’s even more compelling is the fact that all of the transactions had different names and addresses, however, used the same ID cards. Furthermore, there were even individuals outside of Japan, that were abusing the system.

Money laundering supported by cryptos?

What’s important to note about money laundering in Japan is the massive rise in quantity after cryptos were accepted as legitimate payments not too long ago. The authorities have mentioned that before the adaptation of Bitcoin, crypto laundering cases in Japan numbered a little above 15,000 cases, but in 2018 alone more than 400,000 cases were filed. What’s even more disturbing is that more than half of those cases involved banks, while the rest had something to do with credit card companies.

A potential reaction from the Authorities

Although this is not something to worry about for cryptocurrency investors, it is a catastrophe for a sophisticated country like Japan. Over the many years of massive development that the country went through, it managed to instate a relatively low-crime era, which is now being jeopardized by digital currencies. It is not known how rashly the government is going to react but it is expected that it will be reasonable and limited.

Judging by the fact that Japan witnessed 2 major Crypto exchange hacks , such as Mt.Gox in 2014 and Coincheck in 2018 , they still remained quite welcoming to cryptocurrencies. However, funding illegal actions which could potentially lead to terrorism may be too much to handle for the forgiving government.

It would not be unwise for them to campaign for stricter crypto regulations, in fact, they would have the support of most of the country’s population, especially the elderly, who are currently neutral towards cryptos. But once, the news reaches them that cryptos are potential culprits for criminal activity, their neutrality will quickly go south.