Japan has only recently enacted a key new crypto law to better secure the industry and be more transparent. The action comes in the wake of a $305 million domestic crypto hack and increasing worries about the collapse of international exchanges.
The new law requires exchanges to store customer assets in Japan. This is to prevent loss if an overseas platform goes bankrupt or shuts down. The bill also establishes stronger anti-money laundering (AML) laws. These seek to prevent illegal actions such as money laundering and fraud by utilising cryptocurrency.
Another significant shift is that individuals can now use crypto directly in apps. That translates to in-app purchases and services paid for with crypto being officially sanctioned. The law also revises stablecoin rules, cryptos pegged to fiat currencies, to guarantee that they are issued and operated securely and legally.
DMM Bitcoin, a Japanese cryptocurrency exchange, was hit with a massive security breach in May 2024. Approximately 4,502.9 bitcoins, worth approximately $305 million at the time, were stolen. The FBI and Japan’s National Police Agency investigations blamed the attack on North Korea-based hackers, the TraderTraitor group.
Following the breach, DMM Bitcoin promised to repay the money to its users, but eventually decided to shut down. Its assets and users are being moved to SBI VC Trade, with a total relocation expected by March 2025. Thus, Japan’s new legislation seeks to restore confidence in the crypto world and protect investors more from future threats.
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