The Travel Rule now applies to crypto transactions.
Is your business ready?

We help financial institutions and virtual asset service providers (VASPs) comply with the FATF’s Recommendation 16 “Crypto Travel Rule” as required by domestic regulators in a growing number of jurisdictions.

• Notabene is the only end-to-end Travel Rule compliance solution that offers a protocol-agnostic approach to Travel Rule compliance
• Easy to use dashboard & ability to set risk management rules
• Our in-house solution, TRNow, allows counterparty VASPs to share, send, receive, and store required PII data privately and securely

To comply with the FATF Crypto Travel Rule, your VASP needs software that for every transaction:

• Performs robust due diligence or KYC process on counterpart institutions
• Identifies counterparty wallet type (pre-transaction)
• Identifies risk-related details about the beneficiary through blockchain analytics and sanctions screening providers
• Allows you to safely send or receive encrypted customer personally identifiable information (PII) through various messaging protocols
• Stores encrypted customer PII for up to five years
• Generates reports for local regulators

The FATF Recommendation 16 on Wire Transfers, “Travel Rule,” requires member countries’ virtual asset service providers (VASPs), financial institutions, and obliged entities to exchange originator and beneficiary identifying information with counterparties during transmittals above $1,000.* It is important to note that different jurisdictions have different transaction threshold amounts.

Future business opportunities after complying with the FinCEN Travel Rule are immense. FATF Travel Rule compliance presents the most significant opportunity for virtual assets to become widely accepted in everyday use cases. Cryptocurrency companies that comply will have better access to traditional banking, which will allow easier access to institutional investors. They will also be able to provide more visibility and trust around each transaction for their customers.

During the second 12-month review of the revised FATF standards on virtual assets and VASPs that came out in March 2021, the FATF advised their members to implement the travel rule into their domestic legislation “as soon as possible,” including consideration of a staged approach to implementation as appropriate. FATF members shall discuss implementation status through outreach by June 2022. (Section 6: 140)b)

FATF stipulates that in transactions over a certain threshold, the originator VASPs must include and send the following:

• The name of the originator
• The blockchain address of the originator
• The identity of the originator’s VASP
• The originator’s identification number, e.g., National ID number or Passport number
• The virtual asset type and the amount being transmitted, and
• The identity of the beneficiary’s financial institution
• The name of the beneficiary
• The blockchain address or account number of the beneficiary

*It is important to note that different jurisdictions may require slightly different information.

The threshold amount for sending travel rule data varies from jurisdiction to jurisdiction. For instance, the FATF recommends that Virtual Asset Service Providers (VASPs) share certain personally identifying information about the recipient and receiver for cryptocurrency transactions over USD/EUR 1000 globally. Meanwhile, the United Kingdom’s HM Treasury requires Travel Rule data transfers for transactions over GBP 1,000. Additionally, some jurisdictions like the UK, EU, and Singapore require the exchange of travel rule data below the threshold, but with a limited amount of data.

Currently, the FATF found no need to amend standards to include P2P transactions. However, FATF acknowledges that unhosted wallets could constitute a higher risk and that local jurisdictions may mandate that VASPs transacting with unhosted wallets perform an additional risk assessment. Many jurisdictions like Singapore, Switzerland, and the Netherlands are starting to instruct VASPs to verify owners of unhosted wallets.