3 - 5 minute read
Japan’s bitFlyer, a cryptocurrency exchange, announced on Tuesday that it is implementing strict anti-money laundering measures in accordance with the Financial Action Task Force’s (FATF) “Travel Rule” for information sharing on transfers. The measures went into effect on Tuesday afternoon local time and include restrictions on transfers from the exchange to platforms that do not comply with Travel Rule Universal Solution Technology (TRUST), a system developed by US-based crypto exchange Coinbase to ensure firms comply with FATF’s requirements.
The exchange has set notification requirements for receiving and sending crypto to TRUST-compliant platforms in a list of 21 countries, which includes Japan, Israel, Gibraltar, Hong Kong, the Bahamas, and Switzerland. BitFlyer further restricts transfers to complaint platforms in these countries to TRUST-compatible crypto assets such as bitcoin (BTC), ether (ETH), and several ERC-20 tokens. Transfers to and from countries not on this list, as well as transfers to private wallets, can be made in any crypto asset available on the bitFlyer platform, the company said.
Japan recently vowed to implement FATF’s travel rule, which mandates the sharing of crypto transaction information between platforms after the watchdog urged advanced economies grouped in G-7 to take the lead in combating money laundering through digital assets. BitFlyer’s US unit was recently fined by a New York financial regulator for not meeting cybersecurity requirements.
The implementation of stricter anti-money laundering measures is a positive development for the cryptocurrency industry as it seeks to gain wider acceptance among mainstream financial institutions. However, the move also highlights the challenges faced by the industry in complying with global regulatory frameworks. With the increasing scrutiny of cryptocurrency transactions, companies operating in the industry need to ensure that they have robust compliance measures in place.
According to bitFlyer, the measures will help to prevent money laundering and terrorist financing by ensuring that cryptocurrency transactions are traceable and transparent. The exchange has set an example for other cryptocurrency exchanges to follow in implementing measures that comply with global regulatory standards.
Traders need to be aware of the impact of the implementation of the Travel Rule on the cryptocurrency market. The restrictions on transfers to platforms that do not comply with TRUST may limit the liquidity of certain cryptocurrencies, leading to a potential decrease in their value. On the other hand, TRUST-compatible cryptocurrencies such as BTC and ETH may see an increase in demand as they become the preferred assets for compliant transfers.
The Bottom Line
The implementation of stricter anti-money laundering measures by bitFlyer is a positive development for the cryptocurrency industry. However, traders need to be aware of the potential impact of the restrictions on transfers to platforms that do not comply with TRUST. The move highlights the increasing regulatory scrutiny of the industry and the need for companies to have robust compliance measures in place. Traders should consider investing in TRUST-compatible cryptocurrencies such as BTC and ETH, which may see an increase in demand as compliant transfers become the norm.
