Japan tells real estate, crypto firms to tighten AML checks

On Tuesday the Ministry of Land, Infrastructure, Transport and Tourism, the Financial Services Agency, the National Police Agency and the Ministry of Finance issued a joint guidance request asking major real estate and cryptocurrency industry groups to tighten anti‑money‑laundering checks and report suspicious property transactions involving crypto assets.

The request was addressed to bodies including the Japan Cryptocurrency Business Association and several national real estate federations.

The agencies wrote: “Crypto assets, which have the nature of being transferred instantly across national borders, are considered to pose a high risk of being used as a payment method in real estate transactions for the purpose of money laundering.”

Under the Act on Prevention of Transfer of Criminal Proceeds, the guidance instructs real estate agents to carry out customer due diligence on transactions involving crypto, file suspicious transaction reports with regulators and notify police when criminal activity is suspected.

The document warns that converting crypto to fiat on a client’s behalf may constitute operating a “crypto asset exchange business” under the Payment Services Act, an activity that requires registration. Firms that convert crypto or operate without registration could face legal penalties.

The agencies asked crypto exchanges to monitor accounts that receive sale proceeds in crypto and then attempt unusually large or out‑of‑pattern transactions inconsistent with the customer’s known financial background.

Regulators reminded recipients of reporting requirements under the Foreign Exchange and Foreign Trade Act: anyone receiving crypto from overseas valued at more than 30 million yen (about $180,000) must file a payment report with authorities.

Earlier this month the government amended the Financial Instruments and Exchange Act to classify crypto assets as financial instruments. The amendment bans insider trading tied to undisclosed information, requires crypto issuers to publish annual disclosures and increases penalties for unregistered crypto exchanges. The government also backed proposals last year to cap the tax rate on crypto profits at a flat 20 percent.

The multi‑agency request asks industry groups to pass the guidance to their members and to enhance monitoring and reporting practices for property transactions that involve cryptocurrencies.