Japan-based cryptocurrency exchange bitFlyer has announced restrictions to deposits and transfers in order to implement new anti-money laundering (AML) measures put in place by the Financial Action Task Force’s (FATF) “Travel Rule”.
Under the Travel Rule, crypto exchanges need to share information regarding their customers’ details when transactions are made to and from their platforms. The restrictions went into effect on Tuesday, May 30th 2023.
To ensure compliance, bitFlyer has restricted transactions to TRUST-compliant platforms based in 21 countries, including Japan, Canada, South Korea, Singapore, Israel, Hong Kong, Germany, and Switzerland. These platforms only allow transactions for TRUST-compatible cryptocurrencies, such as Bitcoin, Ethereum, and some ERC-20 tokens.
TRUST (Travel Rule Universal Solution Technology) is a system that enables crypto platforms to comply with the Travel Rule. This system was spearheaded by Coinbase, a major cryptocurrency exchange in the US.
In Japan, transactions are only allowed to and from Coincheck, the country’s other TRUST-compatible exchange. Currently, only Bitcoin is the TRUST-compatible asset accepted until Coincheck completes its system development to support ERC-20 tokens.
This move by bitFlyer follows Japan’s recent decision to implement the stringent AML checks from the Travel Rule. It also follows a suggestion from FATF for G7 nations to collaborate on fighting money laundering in the digital assets space.
Moreover, Binance is in the process of transitioning all its users in Japan to a regulated platform called Binance Japan.