Cryptocurrency exchanges in Japan are making adjustments as the Financial Action Task Force's (FATF) Anti-Money Laundering (AML) regulations, known as the Travel Rule, are set to be enforced in the country.
On May 30th, prominent Japanese crypto exchange bitFlyer announced new security measures in an attempt to comply with new regulations.
In particular, bitFlyer is implementing restrictions on deposits and transfers. The new policy will prohibit transactions to and from exchanges not associated with the Travel Rule Universal Solution Technology (TRUST) network.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is a MetaMask Wallet? (And How to Use it - Animated)
It is worth noting that major companies, including Coinbase and Crypto.com, use this platform to securely manage customer data as required by the Travel Rule.
These restrictions, introduced by bitFlyer, apply to 21 countries and regions, including the United States, Hong Kong, Canada, and Singapore, each requiring information notification in line with the Travel Rule.
TRUST supports a limited amount of crypto assets. As it stands, bitFlyer manages TRUST transactions for Bitcoin (BTC) and Ether (ETH) cryptocurrencies, as well as ERC-20 assets like Shiba Inu (SHIB), Polygon (MATIC), and more.
It is worth highlighting that AML limitations apply to all corporate and individual customers who deposit and transfer crypto assets via bitFlyer.
The announcement revealed that apart from bitFlyer, only one other Japanese crypto exchange Coincheck is part of the TRUST network. Presently, only BTC transactions are supported through TRUST by Coincheck and bitFlyer. However, bitFlyer has indicated that more cryptocurrencies, including ETH and ERC-20 tokens, will be supported shortly.
Despite imposing significant constraints on transactions between exchanges, bitFlyer still supports transactions to and from self-custody wallets, such as MetaMask.
The announcement comes as Japan readies itself for the new crypto AML restrictions starting from June 1st. A week earlier, the Japanese parliament decided to bolster AML measures to align the local crypto regulatory framework with international cryptocurrency regulations. Under these rules, any platform handling a crypto transfer larger than $3,000 must provide customer data to the receiving exchange or institution.
