Japan will apply the “travel rule” to transactions with bitcoin and cryptocurrencies

Japan will tighten regulations towards bitcoin (BTC) and cryptocurrencies with the addition of the so-called ‘travel rule’. The standard established by the Financial Action Task Force (FATF) should enter into force in April of next year.

This was announced by the Financial Services Agency (FSA) of the Asian country after issuing a statement to the Association of Cryptocurrency Exchanges. The regulation seeks to reduce money laundering and the financing of terrorism.

“The FATF rules require member jurisdictions to introduce and implement a regulation to obtain sender and beneficiary information associated with the transfer of crypto assets,” the agency explained on Wednesday, March 31.

Applied to bitcoin and cryptocurrencies since 2019, the “travel rule” requires digital asset service providers, such as exchanges or other platforms, to share data about their users. In these cases, any transaction that exceeds 1,000 dollars or euros must be accompanied by personal information of the parties involved.

After that amount, the providers are obliged to supply the name, surname, account number, physical address, identity card number, place and date of birth of the sender. Whoever receives the funds must be identified with their name and account number.

The FSA called on the exchange association to advise its members with the aim of facilitate the application of the ‘travel rule’. Computer systems must be adjusted within one year at the latest.

Users without the right to privacy

The provision has been interpreted in the past as an attack on the privacy of users, since the FATF tries to apply to the bitcoiner ecosystem regulations already activated in the traditional financial system.

Prior to the application of the ‘travel rule’ to bitcoin exchanges, multiple exchanges self-regulated with ‘know your customer’ (KYC) mechanisms as a way to comply with local regulatory requirements of each country.

Some of the data collected by the companies has included photo of identity card, driver’s license, passport or social security number and bank statements to certify the residence address of the operators. Instead, other start-ups They operate without any protocol to identify the operators of their platforms.

At present, the FATF has been questioned in the cryptocurrency industry as it is proposing even tougher new regulations. One of their suggestions is to prohibit bitcoin withdrawals to private wallets, also known as self-custodial ones, as reported by CriptoNoticias.

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