JAKARTA One of the crypto-friendly countries, Japan, has begun to tighten its rules for crypto exchanges. The move is aimed at countering illegal financial activities, namely money laundering. The new rules will start on June 1.
Japan wants to ensure transparency in cryptocurrency transactions to ward off money launching. This policy was taken to meet the requirements set by the international financial watchdog, the Financial Action Task Force (FATF).
The review of laws carried out in December 2022 shows that existing actions are inadequate, so Japan must draw up new rules.
One of the important aspects of this new regulatory framework is the application of "travel rules" issued by the FATF. This rule requires financial institutions to provide detailed information about transactions carried out by their consumers. The information includes registration data such as names and addresses. Violations of this rule will be subject to criminal sanctions.
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Japan's goal in implementing this stricter rule is to fight money laundering and increase global transparency in cryptocurrency transactions. By aligning with global standards, Japan hopes to strengthen its position in the cryptocurrency industry, which in turn will give investors and users greater confidence.
For information, cryptocurrency regulations in Japan are among the strictest in the world. The country has adopted separate ownership rules, leverage limits, and customer fund storage in cold wallets. Japan became one of the first countries to legalize the use of cryptocurrencies.
The case of hacking a leading crypto exchange in Sakura's country, Mt Gox, which cost billions of dollars in user funds, has become an important lesson for Japan. After the incident, the Japanese government immediately tightened its rules.
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