Japan’s NPA Backs Crypto Payment Tracking Software To Monitor Criminal Activity
Japan's National Police Agency (NPA) has backed the development of a software that would help them track cryptocurrency criminals in the country.
Japan’s National Police Agency (NPA) has backed the development of a software that would help them track cryptocurrency criminals in the country.
The authorities have realized that tracking money flows and identifying users will be a huge task. Thus, the reason why they have decided to fund the development of crypto criminal tracking software which would soon be introduced.
Tracking digital currencies across Japan
In Japan, Bitcoin and other cryptocurrencies are legal entities. However, they have been subject to scrutiny, especially the privacy cryptocurrencies like Monero. Government officials in the country want to ensure that cryptos are not used for illegal activities.
The NPA has budgeted 35 million yen ($315,000) for 2019 to fund the creation of the product. The software will be designed by a private company but no concrete details have emerged at this point.
This tool will allow for the tracking of all cryptocurrency transactions of the present and past. It is not similar to other tools used by companies such as Chainalysis, although technical specifics remain unclear at this point.
There are expectations that this software can identify which exchange is used to buy, sell, or trade cryptocurrencies. If that is the case, then it would become easier for the police to identify individual users linked to specific transactions on the network.
The rise of crypto-related crimes in Japan is worrying
The development of this software is something that is very important considering the rise of cryptocurrency-related crimes in the country.
Earlier this month, Tokyo-based security software manufacturer Trend Micro discovered a Bitcoin ATM malware that was available for people to purchase online.
The malware was sold for $25,000 and it allows fraudsters to receive the BTC equivalent of up to 6,750 U.S. dollars, euros, or pounds.
The NPA also disclosed earlier this year that in just eight months last year, a total of 669 cases of suspected money laundering from Japanese crypto exchanges were reported.
The police also revealed in March that roughly $6.2 million-worth of cryptocurrencies were stolen by hackers from Japanese users’ exchange and wallet accounts in 2017.
The Coincheck incident at the start of the year led to the authorities becoming stricter towards cryptocurrency regulations.
The commissioner of Japan’s financial regulator, the Financial Services Agency (FSA), last week stated that the agency wants the crypto sector in the country to grow but under proper regulations.
He added that the goal of the agency is to develop the crypto industry and find a balance between consumer protection and technological innovation.
Over the past few months, the FSA has told several exchanges operating in the country to update their securities so as to keep pace with exponential growth in transaction volumes.