| Japanese lawmakers have agreed to implement stricter anti-money laundering rules for the crypto industry as of June 1. The
tightened regulations will expand the existing rules to include the
Travel Rule, allowing the country to track criminal crypto transactions
more accurately. - The
move came shortly after the global financial crimes watchdog, the
Financial Action Task Force (FATF), found Japan's anti-money laundering
measures insufficient.
- The tightened rules will aim to make the country's national framework more coherent with global regulations.
- The
Travel Rule requires crypto exchanges to share information on senders
and recipients, including the names, addresses, and account information,
with the recipient platform and legal authorities when they process a
transfer worth more than $3,000.
- The
rule has come under fire by the crypto community many times since it
contradicts the industry's characteristics related to anonymity.
- The FATF strongly recommended the travel rule to be implemented to combat money laundering
and terrorism financing through crypto in 2019 and urged its member
states to adopt the rule as soon as possible in June last year.
- The
latest G7 meeting held in Japan earlier in May also showed strong
support for the FATF's efforts to accelerate the global implementation
of the Travel Rule.
- Japan's
Financial Services Agency (FSA) and Virtual Currency Exchange
Association (VCEA) have similarly requested virtual asset service
providers to implement the rule over the last two years.
- Japan's crypto regulations are considered some of the most strict ones globally.
- The country's FSA also recently published
a warning letter for several foreign crypto exchanges, including
Binance, Bybit, and Bitget, claiming they operate in the country without
proper registration.
- Rival crypto exchange Coinbase halted its operations in Japan earlier in 2023.
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