[NEWS] Nomura, Hitachi and others conduct demonstration experiment to combat money laundering using crypto assets and stable coins

On the 17th, Web 3.0 consulting company finoject announced that it has begun a demonstration experiment in collaboration with 12 companies, including Hitachi, NTT Digital, and Nomura Holdings, to improve the sophistication and efficiency of AML (Anti-Money Laundering) countermeasures in the digital asset market, including crypto assets (virtual currencies).

This initiative aims to share data and conduct joint analysis between companies to verify the improvement of AML accuracy and operational efficiency. Participating companies include Web 3.0-related companies such as JPYC, Bitbank, which operates a crypto asset exchange, and analysis company Chainalysis Japan.

The background to the demonstration experiment is to improve the safety of digital asset transactions, which are rapidly expanding, such as crypto assets, stable coins, and NFTs, and to promote the healthy development of the Web 3.0 market.

The market size of these digital assets continues to expand year by year, but at the same time, there are also increasing cases of them being used for financial crimes such as money laundering, and international countermeasures are being strengthened. As a result, finoject points out that there are currently issues such as increasing costs due to individual responses, a shortage of AML specialists, and a lack of know-how in both technical and regulatory areas, and that there is an urgent need to improve AML response.

The current PoC will be carried out from February to April. It will target transaction monitoring, which is a particularly important part of AML operations, and will involve information sharing and analysis using a dedicated platform. finoject says it will use its strengths to play a role in designing the PoC and analyzing the evaluation results.

Money laundering methods using cryptocurrencies are becoming more sophisticated every year. In particular, there are cases where mixing services are used to make it difficult to trace the criminals' tracks, and then the money is laundered on online markets in Southeast Asia and elsewhere.

According to a document published by Chainalysis on the 13th of this month, at least $9.9 billion (approximately 1.5 trillion yen) in criminal proceeds was generated last year through criminal activities using cryptocurrencies. This figure may increase depending on future investigations.

In Japan, against the backdrop of an increase in social media-based investment fraud, the Liberal Democratic Party is considering establishing a system that would allow cryptocurrency exchanges to quickly freeze accounts when they detect fraudulent transactions.

Reference: Announcement
Image: Shutterstock

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