The Act on Prevention of Transfer of Criminal Proceeds prevents money laundering and terrorist financing. Enacted in 2008, it requires "specified businesses" including financial institutions and mobile carriers to perform customer identification (KYC) and report suspicious transactions.
Key phone-related regulation prohibits fraudulent mobile contracts. Contracting phones under others' names and selling/transferring contracted phones to third parties carry penalties of up to 2 years imprisonment or 3 million yen fines. Special fraud groups use "burner phones" (others' names), making this regulation a critical anti-fraud pillar.
Bank account trading is also prohibited. Accounts used as transfer fraud destinations are often purchased from financially struggling individuals. Sellers face up to 1 year imprisonment or 1 million yen fines.
The 2024 amendment expanded KYC obligations to cryptocurrency exchanges and prepaid card issuers. Combined with the Fraud Relief Act, both prevention and recovery measures are strengthened. See fraud prevention guide for details.