Japanese Crypto Exchanges to Enforce FATF’s Travel Rule Next Month
All of Japan’s crypto exchanges will adopt the Financial Action Task Force (FATF)’s Travel Rule on April 1 – a move that means most of East Asia’s biggest trading platforms will have begun complying with the controversial protocol before the law even obliges them to do so.
The Travel Rule essentially requires platforms to stamp out anonymity in crypto transactions in a bid to fight money laundering. At its heart, the rule seeks to create a web of data sharing whereby both the senders and recipients of all cryptoasset transfers have to exchange identifying information, flag suspicious-looking transactions, and inform regulators when they spot a transfer that looks out of place.
The FATF has urged the international community to hurry up and enshrine the Travel Rule into national law. But East Asian trading platforms – which are among the most tightly regulated exchanges in the world – have been keen to show they are capable of complying even without legal prompts.
Hedge Guide reported that the Japanese Virtual Currency Exchange Association (JVCEA), a self-regulating body that comprises all licensed Japanese crypto exchanges as top-tier members and a number of leading firms waiting for licenses as second-tier members, was responding to a call from the regulatory Financial Services Agency (FSA).
The FSA last year requested that JVCEA members form a plan for Travel Rule adherence, and the latter has responded with a two-stage response.
As of April 1, all crypto transactions made through exchanges in Japan will need to be accompanied by the following data:
In a second step, to be put into place on October 1, more details on the recipient will also need to be provided, as well as information about the “purpose of the transaction,”
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