Japan’s Ministry of Justice wants to give courts and police officers the power to seize cryptoassets in criminal cases – and could allow the state to take control of tokens that have been used in money laundering operations.
The Yomiuri Shimbun reported that the ministry wants to amend the Act on Punishment of Organized Crimes and Control of Proceeds of Crime (1999), which gives law enforcement agencies the power to seize “real estate, movable property and monetary receivables.”
The law does not currently allow officers to seize intangible digital assets, however – even though it does allow officers to access bank accounts and cash reserves.
The Ministry of Justice will need to clear a number of legal obstacles before it can get its way, however. It will first need plans to raise the matter with the Legislative Council, a body of civil and criminal law experts. It will also need to iron out the practical and technical aspects of the proposed amendment, outlining details of how courts and police officers should deal with seizing control of wallet owners’ private keys.
The proposal will then need to win the approval of the cabinet and finally parliament. All of these stages are likely to be formalities, however, and the amendment will quite probably be bundled with other measures.
The ministry also wants more power to move against suspected hackers or individuals handling tokens that have been stolen in cybersecurity incidents.
An official from the prosecutor’s office was quoted as saying:
“To ensure confiscation can be carried out effectively [in criminal cases,] the necessary legislative steps must be taken.”
Japanese lawmakers are determined to leave no loopholes in crypto regulation, which is becoming increasingly exhaustive in the nation. Late last week, further anti-money laundering provisions were included in revised fund settlement laws that addressed cryptoasset and stablecoin issuance in Japan.
The law limits the issuance of cryptocurrencies and stablecoins to banks and other regulated financial institutions and will promulgate in just under a year.