DMM Bitcoin seeks to comply with additional AML requirements in Japan

Maria Nikolova

The new rules that apply to companies like banks and virtual currency exchanges allow businesses to request additional information from their clients.

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DMM Bitcoin, the virtual currency exchange business which is a part of Japanese Internet company DMM.com Group, is seeking to respond to new anti-money laundering rules outlined by the Japanese regulators.

In a notice to its clients, DMM Bitcoin said that it may require additional information from them in order to comply with the new rules by the Japanese Financial Services Agency (FSA). In particular, the additional information may concern transaction details and purpose.

The rules in question designed by the FSA aim to prevent money laundering and terrorism financing via financial institutions.

There is no single type of questions that will be asked by the financial businesses that seek to comply with these rules. The questions and the information requested may vary across companies and even within the same company, the FSA warns. For example, customers may be asked for additional identification documents, for extra confirmation procedures of transactions, for more information about the transaction purpose and for information about the status of their assets.

The range of financial businesses to which these requirements apply includes banks, life insurance companies, property insurance companies, securities companies, money lenders, funds clearing businesses, and virtual currency exchanges.

In the meantime, Japanese regulators continue to issue business improvement orders against cryptocurrency firms that have failed to comply with regulatory requirements. The most recent example is Everybody’s Bitcoin Inc, which was sanction after an on-site inspection which had detected a series of non-compliance issues, including problems with keeping statutory books, insufficient provision of information to clients, AML issues, lack of control over system risks, as well as problems with internal audits.

The Japanese authorities have issued a raft of business improvement orders over the last months following the theft of cryptocurrency from Coincheck. GMO Coin, the virtual currency business of GMO Internet Inc. (TYO:9449), was among the companies targeted by such orders. GMO Coin was instructed to establish an effective system risk management system.

Coincheck was eventually acquired by online trading services provider Monex Group, Inc. (TYO:8698), with the JPY 3.6 billion deal completed on April 16, 2018.

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