Japani Government has approved the adoption travel rulesWith a new law coming into effect next month.
But domestic exchanges are facing difficulty in adoption, leading to crypto withdrawal difficulties.
Per Sankei NewsThe Cabinet of Ministers has signed off on amendments to the Prevention of Transfer of Criminal Proceeds Act, which “will take effect from June 1.”
The Travel Rule is a regulatory requirement designed by the Financial Action Task Force (FATF).
FATF is an international money laundering and terrorist financing watchdog.
The rule requires crypto service providers to share “virtual asset transactions as well as originator and beneficiary information”.
FATF claims that this measure helps “prevent criminal and terrorist abuse”.
But in many countries, it has been left to exchanges to develop their own compliance solutions.
And this factor has often led to confusion when it comes to sharing essential data.
Lawmakers are working on amendments to the act after the FATF claimed that Japan’s measures on this front were “inadequate”.
Under the new law, “corrective orders” will be issued to non-compliant Japanese crypto firms.
And those who do not comply “will be subject to criminal penalties,” the media outlet said.
Japan and Travel Regulations – Can Crypto Exchanges Comply in Time?
Most Japanese exchanges are attempting to adopt travel rule-complaint policies before June in anticipation of the legal change.
But the process has proven to be bug-free.
Earlier this month, Japanese media outlets coinpost reported that several top exchanges in the country were facing serious issues with their travel rule compliance solutions.
The chaos means that some Japanese crypto exchange customers are currently unable to withdraw their funds to other domestic platforms.
BitBank announced on May 18 that its users will no longer be able to “send cryptocurrency directly” to “some” rival platforms, including Coincheck and BitFlyer, in the near future.
The media outlet wrote:
“This is due to the fact that each company has a different information notification system for travel rule compliance.”