{"id":12979,"date":"2023-05-24T03:48:06","date_gmt":"2023-05-24T07:48:06","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/japanese-govt-green-lights-travel-rule-adoption-are-crypto-exchanges-struggling-to-comply\/"},"modified":"2023-05-24T03:48:07","modified_gmt":"2023-05-24T07:48:07","slug":"japanese-govt-green-lights-travel-rule-adoption-are-crypto-exchanges-struggling-to-comply","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=12979","title":{"rendered":"Japanese Gov\u2019t Green-lights Travel Rule Adoption \u2013 Are Crypto Exchanges Struggling to Comply?"},"content":{"rendered":"
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The Japanese government has approved the adoption of the Travel Rule, with a new law set to come into force next month.<\/p>\n

But domestic exchanges are experiencing difficulty with adoption, leading to crypto withdrawal difficulties.<\/p>\n

Per Sankei News, the cabinet of ministers has signed off on an amendment to the Act on Prevention of Transfer of Criminal Proceeds, which will \u201ccome into effect on June 1.\u201d<\/p>\n

The Travel Rule is a regulatory requirement designed by the Financial Action Task Force (FATF).<\/p>\n

The FATF is an international money laundering and terrorist financing watchdog.<\/p>\n

The rule requires crypto service providers to share \u201coriginator and beneficiary information alongside virtual asset transactions.\u201d<\/p>\n

The FATF claims that this measure helps \u201cprevent criminal and terrorist misuse.\u201d<\/p>\n

But in many nations, exchanges have been left to develop their own compliance solutions.<\/p>\n

And this factor has often led to confusion when it comes to sharing the required data.<\/p>\n

Lawmakers have been working on revisions to the act after the FATF claimed that Japan\u2019s measures on this front were \u201cinadequate.\u201d<\/p>\n

Non-compliant Japanese crypto firms will be issued with \u201ccorrective orders,\u201d under the new law.<\/p>\n

And those who do not comply \u201cwill be subject to criminal penalties,\u201d the media outlet noted.<\/p>\n

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Japan and the Travel Rule \u2013 Can Crypto Exchanges Comply in Time?<\/h2>\n

Most Japanese exchanges have been attempting to adopt Travel Rule-complaint policies ahead of June, in anticipation of the legal change.<\/p>\n

But the process has proven far from bug-free.<\/p>\n

Earlier this month, the Japanese media outlet CoinPost reported that several of the nation\u2019s top exchanges were experiencing serious problems with their Travel Rule compliance solutions.<\/p>\n

The chaos means some Japanese crypto exchange customers are currently unable to withdraw their funds to other domestic platforms.<\/p>\n

Bitbank announced on May 18 that its users will \u201cnot be able to send cryptoassets\u201d directly to \u201csome\u201d rival platforms, including Coincheck and bitFlyer \u201cin the near future.\u201d<\/p>\n

The media outlet wrote:<\/p>\n

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\u201cThis is due to the fact that each company has a different information notification system for Travel Rule compliance.\u201d<\/p>\n<\/blockquote><\/div>\n