Japanese crypto exchange bitFlyer to implement FATF’s Travel Rule
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Japan is set to unveil a strict crypto monitoring game that will commence in June. To achieve compliance with these new guidelines, the bitFlyer cryptocurrency exchange has adopted strict anti-money laundering guidelines for cryptocurrency transactions.
BitFlyer crypto exchange supports FATF travel rule
The measures being taken by the bitFlyer cryptocurrency exchange on this matter align with the recommendations of the Financial Action Task Force (FATF). The FATF proposed strict AML guidelines for digital assets known as the “Travel Rule.”
The new rules set to govern Japan’s crypto industry will include strict AML guidelines in cryptocurrency transactions in compliance with the Travel Rule. The firms that fail to comply with these new guidelines will face criminal charges.
The Travel Rule is a strict regulatory policy. Under these guidelines, cryptocurrency exchanges, wallet providers, and other service providers will have to share some customer information when processing transactions that exceed $3,000. The customer details that will be needed include the names and addresses of the sender and recipient and their account details.
The bitFlyer exchange is now embracing these rules. The exchange has said that it has placed restrictions on deposits and crypto transfers for individual and corporate clients. This restriction will ensure that users cannot initiate transactions with exchanges that are not part of the Travel Rule Universal Solution Technology (TRUST) network.
The TRUST network is a messaging protocol that is used to transmit information securely between virtual asset service providers. This platform was created by some of the largest cryptocurrency exchanges, including BitGo, Coinbase, and Paxos.
The bitFlyer exchange noted that the digital assets supporting the TRUST network currently include Bitcoin, Ether, Shiba Inu, Polygon (MATIC), and Chainlink (LINK). The firm has also said that the only cryptocurrency exchange that has complied with the guidelines for the TRUST Network is CoinCheck.
However, even in the case of CoinCheck, only Bitcoin transactions are currently permissible with the exchange and meet the requirements of the Travel Rule. However, the bitFlyer exchange expects that Ether and ERC-20 tokens will be supported soon.
The statement released by bitFlyer on the matter said that in the future, the exchange would consider adopting solutions to the travel rule instead of solely relying on improved customer convenience. The cryptocurrency exchange has also said that it could make a decision on ways to handle crypto transfers and deposits.
Stablecoin regulatory framework in Japan
The Japan financial market regulator recently said that the country planned to allow local investors to trade different stablecoins, including Tether (USDT) and USD Coin (USDC). These transactions would be supported latest by the end of the second quarter of 2023. However, some restrictions on the matter are expected.
This development also comes after the country passed a regulation last year where stablecoins were defined as digital money. The law mandates that stablecoins be linked to the Japanese yen or other legal currencies. It also places a limit on the issuance of stablecoins to licensed banking institutions, registered money transfer agents, and trust firms.
