Japanese crypto exchange BitFlyer has started restricting deposits and transfers from and to exchanges that do not adopt the global financial crime watchdog Financial Action Task Force's (FATF) Travel Rule through the Travel Rule Universal Solution Technology (TRUST) network. The new restrictions will apply to 21 countries where information regarding the Travel Rule is required. The countries on the list include the U.S., Canada, Hong Kong, Singapore, Japan, Israel, Gibraltar, the Bahamas, and Switzerland. - The platform also restricted the type of crypto assets that can be transferred from or to the compliant crypto exchanges in these countries to the TRUST-compatible ones, such as Bitcoin (BTC), Ether (ETH), Shiba Inu (SHIB), and Polygon (MATIC).
- The new restrictions are currently in effect for all corporate and individual customers using BitFlyer.
- Coincheck is currently the only Japanese crypto exchange that is a member of the TRUST network.
- The two platforms only support Bitcoin transactions through TRUST between each other for now, with plans to add more TRUST-supported tokens.
- BitFlyer still allows for transactions through self-custody wallets, including MetaMask, and transfers to countries not on the list.
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, aiming to prevent money laundering, has come under fire by the crypto community many times since it contradicts the industry's characteristics related to anonymity.
- The TRUST platform is currently used by major crypto exchanges like Crypto.com and Coinbase as a solution to securely manage customer information legally required by the Travel Rule.
- BitFlyer's move came nearly a week after Japanese lawmakers agreed to implement stricter anti-money laundering rules for crypto as of June 1, expanding the existing rules to include the Travel Rule.
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