Japan will enforce stricter anti-money laundering (AML) measures to trace cryptocurrency transactions. The country’s cabinet has already approved the laws, which will become effective on 1 June, local Kyodo News reported.
Japan’s New Crypto Rules
The new AML laws around crypto will put Japan’s legal frameworks around the industry in line with global standards. The new rules came following the Financial Action Task Force (FATF), an international financial standard-setting agency that deemed specific revised crypto-centric laws brought in December insufficient.
One of the significant features of the new crypto rules will be the enforcement of the so-called ‘Travel Rules’ for tracking transactions in the decentralized industry.
Under the Travel Rules, crypto exchanges, wallet platforms, and other service providers need to collect customer information in transactions of more than $3,000. The information should include the name and address of the sender and recipient, along with their account information. These laws are expected to curb criminal activities using cryptocurrencies.
Upon failure to comply with the proposed laws, the violators will face criminal proceedings.
Countries Pushing for Strict Crypto Monitoring Rules
Japan adopted the new crypto rules when the global leaders of G7 countries discussed the Travel Rules during the summit that ended last Sunday. The G7 committee also clarified its support for Travel Rules to monitor crypto transactions.
Several other countries, including the United States, the United Kingdom, and the European Union, have already adopted the Travel Rules. Several European countries also mandated virtual asset service provider (VASP) licenses for crypto companies, bringing more clarity to the industry.
Meanwhile, Japan has already been regarded as one of the countries with stringent crypto regulations. The country strengthened its oversight of the crypto industry following the Coincheck hack that happened in January 2018. Now, all crypto exchanges operating in the country must be authorized locally.
Binance, the largest crypto exchange regarding trading volume, will start operations in Japan next month. However, two top crypto exchanges, Coinbase and Kraken, shuttered their Japanese operations.
This article was written by Arnab Shome at www.financemagnates.com.