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Japan

All VASPs are subject to AML regulations. The Japanese Regulator uses the term crypto-asset exchange service providers (CESPs) defined as: entities engaged in any of the "following as a business: 1. sale and purchase of cryptoasset or exchange of crypto assets for other cryptoasset; 2. intermediary, brokerage, or delegation for the acts listed in (1) above; or 3. management of users' money in connection with the acts listed in (1) or (2) above; 4. management of users' crypto assets for the benefits of another person (custodian services)".

In March 2021, the FSA issued guidelines to the Japan Virtual and Crypto Assets Exchange Association (JVCEA) where it stated "we understand that your association is also considering the introduction of self-regulatory rules regarding notification of crypto assets transfer (i.e. the travel rule) by April 2022. From the perspective of ensuring the proper and secure conduct of crypto-asset businesses, we request that CESPs promptly proceed with consideration to the appropriate implementation of the notification of information associated with crypto assets transfer (i.e. the travel rule) in order to solve technical and operational challenges, and swiftly establish a regime". 

No details were given as to how it would look like.

Supervisory body

Financial Services Agency (FSA)

Japan Virtual and Crypto assets Exchange Association (JVCEA)

Japan Security Token Offering Association (JSTOA)

Threshold

At the time of writing, unknown - however, we can imagine that Japan will follow the FATF recommendations.

Information to be exchanged

At the time of writing, unknown - however, we can imagine that Japan will follow the FATF recommendations.

When do you need to comply?

According to the FSA requests to the JVCEA, the latest is expected to have set up "self-regulatory rules regarding notification of crypto assets transfer (i.e. the travel rule) by April 2022". 

What else do you need to know?

VASPs have to be registered with the FSA. 

Applicable regulation

Request for Notification of Originator and Beneficiary Information upon Crypto Assets Transfer (the travel rule)

Act on Prevention of Transfer of Criminal Proceeds and the Guidelines for Anti-Money Laundering and Combating the Financing of Terrorism

"Cabinet Office Ordinance on CryptoAsset Exchange Service provider"

Payment Services Act

Guidelines for AML and CFT

Written by:
Delphine Forma
Delphine Forma
Senior Compliance Officer
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