Japanese lawmakers have decided to apply stricter anti-money laundering (AML) measures to track cryptocurrency transactions starting June 1.
On May 23, the japanese parliament made the decision to implement stricter AML procedures from next month, local media outlet Kyodo News reported the same day.
The objective of this measure is to adapt the Japanese legal framework to global regulations on cryptocurrencies.
Lawmakers revised the anti-money laundering legislation in December after the Financial Action Task Force (FATF) deemed it insufficient.
According to reports, A vital feature of the new measures is the application of the “travel rule” to more accurately track proceeds from criminal activity.
The travel rule requires any financial institution that processes a cryptocurrency transfer greater than $3,000 to transmit customer data to the receiving exchange or institution. The data must include the name and address of the sender and recipient, as well as account information.
The travel rule was discussed by world leaders in mid-May at the G7 meeting held in Japan, in which the G7 Committee expressed its support for the travel rule for crypto transactions.
Supported FATF initiatives on accelerating global standards for cryptocurrencies, “including the ‘travel rule’, and his work on emerging risks, including those from DeFi deals and peer-to-peer transactions.”
“G7 countries should lead by example and regulate the crypto sector so that no safe havens exist for illicit crypto transactions”#FATF President T. Raja Kumar´s message to #G7 leaders ahead of the summit in Japan
Read article: https://t.co/l1OTdjGgLY
: https://t.co/GqHhVwoqY9 pic.twitter.com/uDurg1QSDu—FATF (@FATFNews) May 18, 2023
“G7 countries should lead by example and regulate the cryptocurrency sector so that there are no safe havens for illicit crypto transactions,” FATF Chairman T. Raja Kumar told G7 leaders ahead of the Japan. Read the full post here:
Japan was one of the first countries to adopt cryptocurrencies, legalizing them as property. Cryptocurrency regulations in Japan are some of the strictest in the world.
Japan’s financial regulator, The Financial Services Agency tightened its rules on cryptocurrency exchanges following major hacks by Mt.Gox and Coincheck.
The FSA has several rules for exchanges to protect clients: Among them are the separation of client and company assets, which are verified in annual audits.
Investors cannot borrow more than double their investments for leveraged trades on exchanges. Authorized crypto exchanges are also required to keep at least 95% of client funds in cold wallets.
In April, the Web3 project team of Japan’s ruling Liberal Democratic Party published a white paper proposing ways to expand the country’s cryptocurrency sector.
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