BitFlyer Embraces FATF's 'Travel Rule' as Japan Starts AML Regime

Ahead of Japan's strict crypto monitoring regime starting in June, the cryptocurrency exchange bitFlyer has adopted tougher anti-money laundering (AML) rules for digital asset transactions. The measures are in line with the global financial watchdog Financial Action Task Force’s (FATF) AML regulation known as the ‘Travel Rule’.

BitFlyer Adopts Travel Rule

Japan’s upcoming rules are expected to impose stricter AML measures on cryptocurrency transactions in line with the Travel Rule. Finance Magnates reported that non-compliant firms are expected to face criminal charges in line with the new regulation.

Under the Travel Rules, crypto exchanges, wallet platforms, and other service providers are required to share certain customer information for transactions that are more than $3,000. This includes details such as the name and address of the sender and recipient, along with their account information.

Embracing these rules, bitFlyer said it has introduced restrictions on deposits and crypto transfers to all its corporate and individual customers. The restriction means that users will not be able to initiate transactions with exchanges that are not part of the Travel Rule Universal Solution Technology (TRUST) network.

TRUST network is a messaging protocol to securely transmit information between virtual asset service providers. The platform was developed by leading exchanges, such as Coinbase, BitGo, and Paxos.

In the announcement, BitFlyer noted that TRUST-supported digital assets currently covered by its platform include Bitcoin (BTC), Ether (ETH) and ERC-20 tokens, such as Shiba Inu, MATIC and LINK. Additionally, the firm pointed out that only the cryptocurrency exchange CoinCheck is TRUST-compliant in Japan and only BTC transactions are currently permissible with the exchange in line with the Travel Rule. However, BitFlyer expects ETH and ERC-20 tokens to join the list soon.

“In the future, depending on the response of other crypto asset exchange companies, we will consider adopting travel rule solutions other than TRUST to improve customer convenience,” BitFlyer said in a statement in Japanese (as translated by Google). It further pointed out that it could decide to change how it handles crypto deposits and transfers.

Stablecoins in Japan

Meanwhile, Japan’s financial regulator recently disclosed that the country intends to allow local investors to trade foreign stablecoins such as USD Coin (USDC) or Tether (USDT) latest by the end of the second quarter of this year. However, certain restrictions are still expected.

The development follows the country’s passage of a regulation last year that defined stablecoins as digital money. The law requires that stablecoins must be linked to the Japanese yen or another legal currency. Moreover, it limits the issuance of stablecoins to licensed banks, registered money transfer agents and trust companies.

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