Japan’s key financial, real estate, and law enforcement authorities have issued joint guidance on real estate transactions involving digital assets, highlighting the need for stronger due diligence and anti-money laundering (AML) compliance measures.
On April 28, Japan’s Financial Services Agency (FSA), together with the Ministry of Land, Infrastructure, Transport and Tourism, the Ministry of Finance, and the National Police Agency, released guidance outlining how real estate transactions involving digital assets are treated under Japan’s regulatory framework.
According to the notice, authorities said real estate is increasingly being purchased for asset preservation and investment purposes, which may create opportunities for illicit financial activity. They noted that cryptocurrencies, due to their ability to move quickly across borders, may present heightened risks when used as a payment method in real estate transactions.
The guidance clarified that exchanging digital assets for legal tender, or facilitating such exchanges, may fall under Japan’s definition of cryptocurrency exchange operations. Businesses conducting these activities without proper registration as a digital asset exchange operator could be in violation of Japan’s Payment Services Act. Authorities also stated that suspected unregistered operators should be reported.
In addition, real estate businesses that accept cryptocurrency as payment and later convert it into fiat currency were advised not to use unregistered digital asset exchange providers.
The notice also emphasized that real estate agents using digital assets in transactions must conduct strict customer verification procedures in line with the Act on Prevention of Transfer of Criminal Proceeds. Suspicious transactions should be reported to relevant authorities, while cases involving potential criminal activity should be referred to law enforcement.
Digital asset exchanges were also reminded of their obligations to carry out customer verification and report suspicious activity. Authorities cited examples such as customers receiving property sale payments in digital assets and attempting unusually high-value transactions that do not align with their financial profiles.
Additionally, under Japan’s Foreign Exchange and Foreign Trade Act, individuals receiving digital assets valued above JPY 30 million (approximately $187,749) from overseas must submit a “Report on Payment or Receipt of Payment.” Non-residents purchasing real estate in Japan are also required to file a “Report on Acquisition of Real Estate or Related Rights in Japan.”
The notice was sent to major real estate and digital asset industry organizations, including the Japan Cryptocurrency Business Association and several national real estate federations, with authorities urging broader awareness and compliance across the sector.
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