Japan is moving with the times and adopting cryptocurrencies. However, digital asset transactions are not as safe as people think. As such, governments expect to implement a host of improvements in the coming days. Japan, for example, has decided to implement the travel rule from June 1, 2023, to better deal with the abuse of crypto transactions, mainly for the malicious purpose of hiding money laundering illegal financial transactions.
Simply put, Travel Rule seeks out exchanges to share data on customers who transact over $3,000. This will help to track the movement of funds and thus facilitate the tracing of criminal activities. It works with cryptocurrencies and stablecoins, a form of digital asset that is directly pegged to a fiat currency like the U.S. dollar.
The Travel Rule comes months after the Japanese government amended its laws related to cryptocurrencies. Specifically, the revisions were made in December, just after the Financial Action Task Force highlighted that not enough was being done to address the problem.
While Japan has been grabbing the headlines for now, several watchdog groups in different countries are trying to improve local regulations to bring them on par with global standards. This is to strengthen monitoring mechanisms to see if funds are being obtained from illicit sources. The information a trading platform must share about a client is their name and address.
If the parties, customers or platforms find violations, they will be investigated for criminal responsibility according to law. Long overdue, especially if the community really wants to accelerate the global adoption of digital assets and their trading.
bitFlyer joined the club, announcing restrictions on deposits and transfers. Importantly, trading platforms have banned transactions processed from platforms that do not comply with the Travel Rule.
Therefore, any platform that is not part of the TRUST network (short for Travel Rule Universal Solution Technology) cannot see its transactions being processed by bitFlyer. The network already has Coinbase and Crypto.com as major players.
The restrictions imposed by bitFlyer span 21 countries, including but not limited to Canada, the United States and Hong Kong. The swift passage of revised regulations implemented in Japan could answer this question— Is bitFlyer safe? For customers in the area? bitFlyer’s Anti-Money Laundering restrictions apply to both individual and corporate customers.
bitFlyer continues to support self-hosted wallets such as MetaMask. The trading platform supports BTC through TRUST, and more digital assets are expected to come online soon.
The Japanese trading platform CoinCheck is part of TRUST. It can interact with bitFlyer to support BTC transactions through the network. ETH and other ERC-20 tokens may soon hit the network, according to a statement from bitFlyer. Waiting for more details on the development.