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Japan is preparing to introduce stringent anti-money laundering (AML) regulations on cryptocurrency transactions starting June 1, according to a recent cabinet decision reported by local news media Kyodo News.
Stricter Rules on Crypto Regulations Coming in Japan
With the escalating security vulnerabilities within the crypto ecosystem, regulatory authorities in various countries are adopting stricter rules regarding crypto regulations. As the crypto ecosystem has grown over the years, security vulnerabilities within the system have correspondingly increased. Numerous fraudulent projects have been launched by swindlers seeking to exploit the popularity of cryptocurrencies, causing many investors to lose their funds. One such instance occurred recently with the crypto project DF Fintoch disappearing with approximately $32 million in funds.
In addition to these security weaknesses, allegations that cryptocurrencies are frequently used for money laundering have sparked a public debate. In response to these issues, Japan has rolled up its sleeves to introduce stricter rules in crypto regulations.
“Travel Rules” Are Coming For Crypto Transactions
For the implementation of so-called “travel rules” on crypto transactions, Japan will put into practice the rule set by the Financial Action Task Force (FATF). The primary aim of this new regulation is to broaden the range of anti-money laundering activities and to curb the use of cryptocurrencies in money laundering. This new regulation requires crypto exchanges, wallet platforms, and other service providers to gather customer information for transactions exceeding $3,000.
