Cryptocurrency exchanges in Japan are preparing for the enforcement of the Financial Action Task Force’s Anti-Money Laundering (AML) regulations known as the Travel Rule.
On May 30, major Japanese crypto exchange bitFlyer announced the adoption of measures in response to the enforcement of stricter AML standards targeting crypto transactions in Japan.
BitFlyer has introduced restrictions on deposits and transfers, disabling transactions to and from exchanges that are not part of the Travel Rule Universal Solution Technology (TRUST) network. Adopted by major industry firms like Coinbase and Crypto.com, Trust is a platform allowing exchanges to securely manage customer data legally required by the Travel Rule.
How the TRUST network works. Source: Notabene
BitFlyer’s latest restrictions relate to 21 countries and regions that require information notification based on the Travel Rule. In the announcement, the listed countries and regions are shown in the table, including jurisdictions like the United States, Canada, Hong Kong, Singapore and others.
There are also restrictions on the types of crypto assets supported by TRUST. BitFlyer currently facilitates TRUST transactions for cryptocurrencies like Bitcoin (BTC) and Ether (ETH), as well as ERC-20 assets like Shiba Inu (SHIB), Polygon (MATIC) and others.
Effective immediately, BitFlyer’s new AML restrictions apply to all corporate and individual customers who deposit and send crypto assets using the exchange.
According to the announcement, Coincheck is the only Japanese exchange part of the TRUST network and can interact with bitFlyer. At the time of writing, Coincheck and bitFlyer only support BTC transactions via TRUST. More cryptocurrencies, including ETH and ERC-20 tokens, are coming in the near future, bitFlyer noted.
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While adopting significant restrictions on transactions between exchanges, bitFlyer still supports transactions to and from self-custody wallets like MetaMask.
BitFlyer did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.
The news comes amid Japan’s preparations to enforce new crypto AML restrictions starting from June 1. On May 23, the Japanese parliament decided to strengthen AML measures to bring the local crypto framework in line with global crypto regulations. The new rules require any platform processing a crypto transfer greater than $3,000 to pass on customer data to the recipient exchange or institution.
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