On May 30, major Japanese crypto exchange bitFlyer announced the implementation of measures in response to the stricter enforcement of anti-money laundering (AML) regulations targeting crypto transactions in Japan.
To comply with these regulations, bitFlyer has imposed limitations on deposits and transfers. Transactions to and from exchanges that are not part of the Travel Rule Universal Solution Technology (TRUST) network have been disabled. TRUST is a platform used by prominent industry firms like Coinbase and Crypto.com to securely manage customer data required by the Travel Rule in a legally compliant manner.
The new restrictions implemented by bitFlyer pertain to 21 countries and regions where information notification based on the Travel Rule is mandatory. The announcement includes a table listing the affected jurisdictions, such as the United States, Canada, Hong Kong, Singapore, and others.
Furthermore, the types of crypto assets supported by TRUST are subject to restrictions. Currently, bitFlyer facilitates TRUST transactions for cryptocurrencies like Bitcoin, Ether, as well as ERC-20 assets like Shiba Inu, Polygon, and others.
These updated AML restrictions by the Japanese exchange are immediately applicable to all corporate and individual customers who deposit and send crypto assets using the exchange.
Other Exchanges Adopting Travel Rule like bitFlyer
As per the announcement, the Japanese exchange highlighted that Coincheck is the sole Japanese exchange integrated into the TRUST network, enabling interaction with bitFlyer. Presently, both Coincheck and bitFlyer exclusively support BTC transactions through TRUST. However, bitFlyer stated that additional cryptocurrencies, including ETH and ERC-20 tokens, will be introduced in the near future.
Despite implementing significant restrictions on exchange-to-exchange transactions, the exchange continues to facilitate transactions to and from self-custody wallets such as MetaMask.
This development coincides with Japan’s preparations to enforce major AML restrictions in the crypto sphere, beginning on June 1. On May 23, the Japanese parliament decided to strengthen AML measures to align the local crypto framework with global regulations. The new regulations specifically require any platform handling a crypto transfer exceeding $3,000 to share customer data with the recipient exchange or institution.