The Japanese Government has approved the adoption of the Travel Rule, with a new law set to come into force next month.
Onย theย otherย hand, domestic exchanges are experiencing difficulty with adoption, leading to cryptocurrency withdrawal difficulties.
Per Sankei News, the cabinet of ministers has signed off on an amendment to the Act on Prevention of Transfer of Criminal Proceeds, which will โcome into effect on June 1.โ
The Travel Rule is a regulatory requirement designed by the Financial Action Task Force (FATF).
The FATF is an international money laundering and terrorist financing watchdog.
The rule requires cryptocurrency service providers to share โoriginator and beneficiary information alongside virtual investment transactions.โ
The FATF assertsย that this measure helps โprevent criminal and terrorist misuse.โ
Onย theย otherย hand, in numerous countries, exchanges have been left to develop their own compliance solutions.
And this factor has often led to confusion inย theย caseย of sharing the required data.
Lawmakers have been working on revisions to the act after the FATF arguedย that Japanโs measures on this front were โinadequate.โ
Non-compliant Japanese cryptocurrency corporations will be announced with โcorrective orders,โ under the new law.
And those who doย not comply โwill be subject to criminal penalties,โ the media outlet noted.
Japan and the Travel Rule โ Can Cryptocurrency Exchanges Comply in Time?
Most Japanese exchanges have been tryingย to adopt Travel Rule-complaint policies ahead of June, in anticipation of the legal change.
Onย theย otherย hand, theย procedure has proven far from bug-free.
Earlier theseย 30ย days, the Japanese media outlet CoinPost informed that plentyย of of the nationโs top exchanges were experiencing serious complications with their Travel Rule compliance solutions.
The chaos means some Japanese cryptocurrency exchange customers are asย ofย now unable to withdraw their funds to other domestic platforms.
Bitbank postedย on May 18 that its users will โnot be able to send cryptoassetsโ directly to โsomeโ rival platforms, including Coincheck and bitFlyer โin the near future.โ
The media outlet wrote:
โThis is owingย to the fact that each company has a different information notification system for Travel Rule compliance.โ
