Explore Travel Rule Implementation
Stay ahead of Travel Rule regulatory changes. Check implementation deadlines, thresholds and main requirements for your country.
What is the Crypto Travel Rule?
The Crypto Travel Rule, based on FATF Recommendation 16, is a global standard designed to combat money laundering and terrorism financing (ML/TF). It requires Virtual Asset Service Providers (VASPs) and financial institutions handling virtual asset (VA) transfers to collect and share sender and recipient details before or during a transaction.
The rule ensures that personal data “travels” with a crypto or fiat transaction, increasing transparency and traceability. While originally this only applied to traditional finance, it now extends to crypto transactions, requiring VASPs around the world to implement robust compliance measures.
The Crypto Travel Rule, based on FATF Recommendation 16, is a global standard designed to combat money laundering and terrorism financing (ML/TF). It requires Virtual Asset Service Providers (VASPs) and financial institutions handling virtual asset (VA) transfers to collect and share sender and recipient details before or during a transaction.
The rule ensures that personal data “travels” with a crypto or fiat transaction, increasing transparency and traceability. While originally this only applied to traditional finance, it now extends to crypto transactions, requiring VASPs around the world to implement robust compliance measures.
Who needs the Travel Rule?
The Travel Rule applies to all Virtual Asset Service Providers (VASPs) and financial institutions that are engaged in VA transfers. The Travel Rule may apply to decentralized services (DeFi) and other P2P platforms under certain conditions.
A business is considered to be a VASP if it provides the following services:
- Exchange between virtual assets and fiat currencies
- Exchange between one or more forms of virtual assets
- Transfer of virtual assets
- Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets
- Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset
The Travel Rule applies to businesses when:
- Transfers to unhosted wallets occur (VASPs don’t need to send required details directly to the individual but must collect the information for compliance)
- Traditional wire transfers occur
- Virtual asset transfers happen between VASPs or between a VASP and a financial institution
Jurisdictions list
TR Requirements by Country
FATF Travel Rule Requirements
The Travel Rule’s main requirements are:
- To conduct due diligence of the counterparty before sharing data
- For originating VASP:
- Identify its client (originator)
- Obtain the necessary information from the originator, retain a record and share the information with the beneficiary VASP after all checks
- Screen to confirm that the beneficiary is not a sanctioned name
- Monitor transactions and report when they raise suspicion
- For beneficiary VASP:
- Obtain the necessary information from the originator’s VASP, verify the accuracy and consistency of the necessary information, and retain a record
- Screen to confirm that the originator is not a sanctioned name
- Monitor transactions and report when they raise suspicion
For transfers under 1,000 USD/EUR, VASPs must collect:
- The name of both the originator (sender) and beneficiary (recipient)
- A VA wallet address for each or a unique transaction reference number
- Verification is only required if there are ML/TF risks
For transfers above 1,000 USD/EUR, VASPs must also collect:
- Originator details:
- Full name
- Account number (e.g., wallet address)
- Physical address, national ID/tax number, or date and place of birth
- Beneficiary details:
- Full name
- Account number (e.g., wallet address)
What is the Travel Rule threshold?
The Travel Rule threshold applies to transactions, with the FATF recommending a $1,000/€1,000 de minimis limit. However, countries set their own thresholds or may not have one at all (as seen in our Travel Rule country map).
This results in different cases: information is shared only above the threshold, varying requirements apply below it, or all transactions require reporting.
Travel Rule compliance checklist
For a smooth Travel Rule implementation that ensures you stay compliant, there are several elements the Travel Rule solution should cover.
These include:
- Scaling to handle high transaction volumes without interruptions.
- Meeting all regulatory requirements, including counterparty VASP verification, with documentation to support compliance.
- Conducting AML screening and ongoing monitoring to detect new sanctions.
- Verifying assets to prevent connections to illicit sources like darknet markets.
- Ensuring secure, accessible recordkeeping to maintain compliance.
- Protecting stored and transferred data in line with national privacy laws.
- Supporting multiple messaging protocols for seamless data exchange with VASPs.
- Making the integration is fast, efficient, and minimally disruptive to existing systems.
FAQ
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Is there a standard for Travel Rule data transfers?
The FATF does not advise the use of a specific data sharing technology, so there is no single protocol or network standard for data transfers. While a number of networks for encrypted data transfer exist, there are issues like protocol compatibility. A solution that combines data gathering and data sharing is optimal for businesses to stay compliant.
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FATF vs BSA Travel Rule?
The FATF Travel Rule and the BSA Travel Rule both require financial institutions and VASPs to collect and share transaction details for AML/CTF compliance, but they differ in key aspects. The BSA Travel Rule (U.S.) applies to transactions ≥ $3,000 and mandates additional details such as execution date, transaction amount, and financial institution identity. The FATF Travel Rule (global standard) recommends a $1,000/€1,000 threshold, with fewer required data points. While FATF sets guidelines adopted by different countries, the BSA Travel Rule is U.S.-specific and enforced by FinCEN.
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What are Travel Rule compliance challenges?
Travel Rule implementation faces several key challenges. Technology suitability is a major hurdle, as FATF does not mandate a specific solution, leading to fragmented, country-specific systems that may not support all virtual assets or require third-party approvals. Interoperability remains an issue, with differing global standards and conflicting data privacy laws like GDPR. The "sunrise issue" complicates compliance, as VASPs in some jurisdictions must follow the rule while others are not yet obligated. Finally, counterparty identification poses difficulties, as VASPs must verify whether they are transacting with another regulated VASP or an unhosted wallet, with no universal framework in place.
