According to local news site Kyodo News, Japan is due to introduce tighter anti-money laundering measures, including the Financial Action Task Forces (FATF) so-called “travel rule,” on June 1.
The decision was announced by Japans cabinet on Tuesday, after the global financial crime watchdog FATF found the countrys anti-money laundering measures inadequate.
According to the research, oversight groups have increased their surveillance of crypto assets that might be used to launder money, a practice in which money earned from unlawful acts is made to seem legitimate by processing it via legal transactions.
The FATF suggested the travel rule in 2019 to prevent money laundering and terrorism funding using cryptocurrency. By June 2022, the FATF was pressing member countries to pass travel rules “as quickly as feasible.”
The regulation mandates a financial institution conducting a crypto asset transfer to pass on customer information to the next institution, including the sender and recipients names and addresses.
Stablecoins, or cryptocurrencies tied to a currency such as the US dollar or a commodity, are among the crypto assets sought. If offenders do not comply with authorities remedial directives, they will face criminal charges.
Earlier this month, the Group of Seven (G-7) international political body expressed support for the FATF‘s efforts to hasten the worldwide implementation of its travel rule, which requires financial institutions to provide information about crypto money transfers. At the time, Japan had not enacted the travel rule. Japan’s decision to enforce the regulation is considered as an attempt to line with global norms backed by the G-7, of which Japan now serves as president.
Japan was an early embrace of cryptocurrency, legalizing it as property. Japan‘s cryptocurrency restrictions are among the most severe in the world. After the massive hacks of Mt.Gox and Coincheck, Japan’s financial regulator, the Financial Services Agency, tightened regulations on cryptocurrency exchanges.