All crypto exchanges in Japan will adopt the Financial Action Task Force (FATF)’s Travel Rule on April 1 – a move that means most of East Asia’s biggest shopping platforms will have started complying with the controversial protocol even before they are required by law to do so.
The travel rule essentially requires platforms to remove anonymity in crypto transactions in an effort to combat money laundering. At its heart, the rule aims to create a data-sharing network in which senders and recipients of all crypto-asset transfers must exchange identifying information, report suspicious transactions, and notify regulators when they spot a transfer that seems out of place.
The FATF urged the international community to hurry up and enshrine the travel rule in national law. But East Asian trading venues – which are among the most regulated exchanges in the world – have been keen to show that they are able to comply even without legal prompts.
Hedge Guide reported that the Japan Virtual Currency Exchange Association (JVCEA), a self-regulatory body that includes all Japanese crypto exchanges licensed as first-tier members and a number of leading companies awaiting licenses as second-tier members, was responding to a regulator call Financial Services Agency (FSA).
Last year, the FSA asked JVCEA members to develop a plan for compliance with travel rules, and the latter responded with a two-step response.
Starting April 1, all crypto transactions made through exchanges in Japan will need to be accompanied by the following data:
- The recipient’s name
- Data on the origin of the transaction (and whether or not the transaction is from an exchange)
- Data about the recipient’s address and information about whether or not the recipient’s wallet is hosted on an exchange
In a second step, which will be put in place on October 1, it will also be necessary to provide more details about the recipient, as well as information on “the purpose of the transaction”, although the exact details are “still to be determined”. . ”
Additional information will also be required from anyone transacting over $865.
As noted, South Korea’s major crypto exchanges are collaborating on joint travel compliance efforts or launching their own models, months ahead of the enactment of legislation requiring them to do so.
Additionally, in February, a group of major crypto companies, such as Anchoring, bitgo, BlockFi, Circle, Coinbase, Gemini, kraken, and more, announced the launch of Travel Rule Universal Solution Technology (TRUST), a solution designed to comply with a requirement known as the Travel Rule while protecting the security and privacy of their customers. they stated. The solution already includes well-known industry members in the United States, while global expansion will follow “shortly”, they added.
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Japanese Crypto Exchanges To Enforce FATF Travel Rule Next Month
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