Svmuu News: Stablecoins—a new type of electronic payment tool that has attracted attention from governments and financial institutions—are being used by some criminal groups for money laundering. Because stablecoins are pegged to fiat currencies, exhibit minimal price volatility, and allow for fast transfers, fraud rings have begun converting funds obtained through specific scams into stablecoins to conceal the source of the funds. In March of this year, police in Osaka Prefecture, Japan, arrested three men on suspicion of violating the Act on Punishment of Organized Crimes, charging them with assisting an investment fraud ring in laundering funds. Police stated that the three men converted approximately 14 million yen—funds obtained from 10 victims across six prefectures in Japan—into crypto assets, including stablecoins, in an attempt to conceal the flow of funds. According to the investigation, the three men engaged in “over-the-counter” (OTC) transactions—cryptocurrency trades conducted directly between individuals without the involvement of exchanges—and police believe they may have been involved in money laundering activities amounting to tens of billions of yen. Reports note that stablecoins operate on blockchain technology and feature characteristics such as transaction records that are difficult to tamper with; however, their rapid cross-border transfers and peer-to-peer transaction model also make tracking more difficult. Naoyuki Iwashita, professor emeritus at Kyoto University, stated that once digital assets are exploited by criminals, subsequent investigations and fund tracing will face greater challenges. As the use of stablecoins expands in the Japanese market, industry insiders believe that strengthening anti-money laundering (AML) measures and transaction oversight will become essential conditions for their development. (Kyodo News)