As the scope of Japan’s Travel Rule has expanded from 58 to 63 jurisdictions, Korean companies conducting business with the Japanese market may need to broaden the scope of their compliance reviews.
Intersection Between Japan’s Virtual Asset Market and Korean Companies
In recent years, transactions involving Korean virtual asset service providers, fintech companies, Japanese customers, and Japanese crypto exchanges have increased.
However, Japan’s Travel Rule framework is not based on a fixed list. The scope is periodically revised through notifications issued by Japan’s Financial Services Agency and Ministry of Finance.
With the latest expansion of designated jurisdictions, Korean companies maintaining transaction relationships with Japan may need to review a broader range of counterparties and transfer arrangements.
What Is the Travel Rule and What Is Its Legal Basis in Japan?
The Travel Rule requires information about the originator and beneficiary to be transmitted to the counterparty service provider when virtual assets are transferred.
Originating from FATF Recommendations 15 and 16, the framework became a legal obligation in Japan from June 1, 2023 through amendments to the Act on Prevention of Transfer of Criminal Proceeds.
The rule generally applies to virtual asset exchange service providers and electronic payment instrument exchange service providers. When transfers are made from a domestic operator to a foreign operator located in a designated jurisdiction, the notification obligation may apply regardless of the amount or type of asset.
Key information generally includes:
- Name of the originator
- Wallet address, physical address, or customer identification number of the originator
- Name of the beneficiary
- Wallet address of the beneficiary
However, the applicable obligations may differ depending on whether the transfer is made to a self-hosted wallet, an unregistered operator, or another electronic payment instrument service provider. The location of the counterparty and whether that jurisdiction is included in the designated list are therefore important considerations.
Key Changes Under the Latest Amendment
On July 7, 2026, Japan’s Financial Services Agency and Ministry of Finance announced partial amendments to the notification designating countries and regions under Articles 17-2 and 17-3 of the Enforcement Order of the Act on Prevention of Transfer of Criminal Proceeds.
The amendment adds the following five jurisdictions:
- Anguilla
- Oman
- Cuba
- Dominican Republic
- Botswana
As a result, the number of designated jurisdictions increased as follows:
Category | Before Amendment | After Amendment |
Virtual asset Travel Rule jurisdictions | 58 | 63 |
Electronic payment instrument jurisdictions | 57 | 62 |
Effective date | - | August 3, 2026 |
Source: Notifications issued by Japan’s Financial Services Agency and Ministry of Finance
The designation is based on whether the counterparty jurisdiction maintains a Travel Rule framework comparable to that of Japan.
During the amendment process, there were also proposals to add China, Vietnam, and Russia. These countries were not included in the present amendment because they had not yet established sufficiently equivalent frameworks.
This demonstrates that designation is determined primarily by the maturity and comparability of the applicable regulatory framework, rather than transaction volume or number of users.
The latest amendment follows another major expansion announced in April 2025 and effective from August 1 of the same year, when the number of designated jurisdictions increased from 28 to 58.
Japan’s regulators continue to reassess the scope of designated jurisdictions by reference to developments such as FATF mutual evaluation results, meaning further revisions may follow.
Practical Points Korean Companies Should Review
Korea was already included among Japan’s designated jurisdictions, so the latest amendment does not fundamentally change the Travel Rule framework applicable to Korea-Japan transfers.
However, additional review may be required for companies falling into the following categories.
Companies Registered or Applying for Registration as a VASP in Japan
Companies directly subject to Travel Rule obligations should update their systems and procedures so that transfers to counterparties located in newly designated jurisdictions can be processed in compliance with the applicable information-sharing requirements.
Companies Regularly Transferring Assets to Japanese Exchanges
Even if the Korean company itself is not directly subject to Japanese Travel Rule obligations, its transaction network should be reviewed in advance to reduce delays caused by exchange requests for additional transfer information.
Companies Preparing Stablecoin-Related Businesses
Separate jurisdictional criteria may apply to electronic payment instruments. Companies planning stablecoin-related businesses should therefore reflect the relevant Travel Rule requirements in their compliance structures from the initial planning stage.
The exact scope of the applicable obligations may differ depending on the relevant enforcement regulations and supervisory notifications, so transaction-specific review may be necessary.
How Decent Law Firm Can Assist
Japan’s virtual asset regulatory framework is not static. It continues to evolve, and the latest expansion of Travel Rule jurisdictions is one example of this ongoing regulatory development.
Decent Law Firm’s International Practice Group provides practical support across the full lifecycle of Japan-related virtual asset regulatory compliance, including:
- Advice on registration as a virtual asset exchange service provider in Japan
- Monitoring of Travel Rule jurisdiction updates
- Regulatory advice for stablecoin market entry
- Review of Korea-Japan cross-border virtual asset transfer structures
- Compliance review for transfers involving Japanese exchanges
If you are considering entering the Japanese market or need to review your current compliance framework, it is advisable to assess the applicable Travel Rule requirements before expanding your transaction structure.