Crypto Travel Rule Reports

Stay Ahead of Regulatory Changes in The European Union

This essential resource is designed to help crypto asset service providers (CASPs) prepare for the upcoming changes in Travel Rule compliance brought about by the EU's Transfer of Funds Regulation and the EBA's Travel Rule Guidelines.

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What's Inside:

• Introduction to the Travel Rule: Understand its foundational principles and global impact, including its extension to virtual assets and service providers.
• Detailed Regulatory Milestones: Track the evolution of the Travel Rule within the EU and its alignment with FATF guidelines.
• Information Transmission Requirements: Learn the general transmission obligations and specific data requirements for natural and legal persons during crypto transfers.
• General Obligations for CASPs: Gain insights into the infrastructure and procedural obligations necessary for compliance.
• Obligations of Beneficiary CASPs: Explore strategies for handling transactions and deposits, including managing non-compliant counterparts.
• Self-Hosted Wallet Transactions: Discover the distinct obligations for transactions involving self-hosted wallets, tailored by transaction amount and counterparty type.

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Download now to access the insights.

In its “Virtual Assets: Targeted Update on Implementation of the FATF Standards,” the Financial Action Task Force published guiding questions that provide much-needed clarity on what constitutes a compliant Travel Rule implementation. This downloadable guide compares these criteria with Notabene's Travel Rule solution, SafeTransact.

Download your copy to learn how Notabene's SafeTransact meets and exceeds FATF's requirements, including:

• Pre-transaction information sharing,
• Counterparty identification and due diligence,
• Submitting Travel Rule data for small value VA transfers (i.e., below USD/EUR 1 000) to accommodate varying threshold requirements across jurisdictions.
• … and much more

Related posts:

🔗 Clear Travel Rule Expectations: Key Outcome of FATF Plenary - June 2023

Get a concise overview of the FATF Travel Rule requirements in the EU, including:

• Compliance thresholds
• Protocol interoperability requirements
• Obligations for CASPs
• Managing non-compliant transactions and counterparties
• Non-custodial wallet requirements

Perfect for a quick yet comprehensive understanding of the upcoming regulatory changes for European CASPs.

For a more detailed analysis, download our comprehensive 30-page report

here.

The European Union (EU) has established comprehensive rules to harmonize cryptocurrency regulation. The Markets in Crypto-assets (MiCA) framework addresses consumer protection, asset classification, licensing, and market abuse. Additionally, the Transfer of Funds Regulation (TFR) ensures compliance with the Financial Action Task Force’s (FATF) rules for tracking crypto transactions.

MiCA and TFR were adopted on May 31, 2023. All Crypto-Asset Service Providers (CASPs) in the 27 EU member states must comply with the crypto Travel Rule by December 30, 2024.

Download our jurisdiction guide for an in-depth look at FATF Travel Rule requirements across all 27 EU member states. Highlights include:

• Travel Rule compliance thresholds
• Protocol interoperability requirements
• Obligations for European beneficiary CASPs
• Management of non-compliant transactions and counterparties
• Non-custodial wallet requirements

+ much more

Since 2020, Singapore has rigorously enforced the Crypto Travel Rule, compelling Virtual Asset Service Providers (VASPs) to implement stringent anti-money laundering and counter-terrorism measures. This encompasses extensive record-keeping and detailed reporting, ensuring thorough verification of both originator and beneficiary information in crypto transactions.

Download our detailed jurisdiction guide for an in-depth look at Singapore's cryptocurrency regulation.

Highlights include:

• a timeline of pivotal regulatory developments
• an exploration of the specific personally identifiable information (PII) requirements for both local and international transfers, and a focus on the distinctive handling of non-custodial wallet transactions.
• the transaction thresholds that trigger compliance
• … and more

Download Our Crypto Pre-Transaction Compliance Guide

Unlock the full potential of your compliance strategy with our comprehensive guide on pre-transaction decision-making for crypto transactions. Learn how to effectively meet the FATF’s Travel Rule requirements and safeguard your operations with Notabene’s robust SafeTransact platform.

What’s Inside:

• The importance of pre-transaction compliance
• Key steps for VASP-to-VASP and VASP-to-self-hosted wallet transactions
• Challenges and progress in the industry
• How crypto’s only pre-transaction decision-making platform, SafeTransact, aids VASPs to stop illicit activity before it occurs.

Equip your team with the knowledge and tools to mitigate risks and enhance security.

Download Now to get started on your path to seamless crypto compliance.

Enforced since June 1, 2021, the Crypto Travel Rule in Canada mandates Virtual Asset Service Providers (VASPs) to adhere to enhanced anti-money laundering and counter-terrorism financing measures, including expanded record-keeping and reporting obligations that require the collection and verification of originator and beneficiary information.

Download the jurisdiction guide to learn important information about cryptocurrency regulations in Canada, including:

• A timeline illustrating the progressive regulatory action.
• The specific personally identifiable information (PII) required to adhere to the Travel Rule in Canada
• The minimum transaction threshold that triggers Travel Rule compliance in Canada
• … and more

April 2021 marked a milestone in Malaysian cryptocurrency regulations with the Securities Commission Malaysia (SCM) integrating the crypto Travel Rule into the national framework. The Crypto Travel Rule went into effect in Malaysia a year later, on April 1, 2022.

Download the jurisdiction guide to learn important information about cryptocurrency regulations in Malaysia, including:

• A timeline illustrating the progressive regulatory action.
• The specific personally identifiable information (PII) required to adhere to the Travel Rule in Malaysia
• The minimum transaction threshold that triggers Travel Rule compliance in Malaysia, and much more.

Starting January 26, 2021, the Bangko Sentral ng Pilipinas (BSP) requires all Virtual Asset Service Providers (VASPs) to follow robust security standards. 

These include adherence to the Financial Action Task Force (FATF) guidelines, implementing anti-money laundering measures, reporting suspicious transactions, and conducting thorough customer due diligence.

Download the guide above to learn important information about cryptocurrency regulations in the Philippines, including:

• The timeline of regulatory action
• Required personally identifiable information to be shared
• The minimum threshold that triggers Travel Rule compliance in the Philippines, and more

In its AML/CTF Guidelines for SFC-licensed VASPs, Hong Kong’s Securities and Futures Commission (SFC)  outlined criteria to determine whether the Travel Rule solution provider enables VASPs to comply effectively and efficiently. This downloadable guide compares these criteria with Notabene's Travel Rule solution, SafeTransact.

Download your copy to learn how Notabene's SafeTransact meets and exceeds Hong Kong's requirements, including:

• Pre-transaction information sharing,
• Counterparty identification and due diligence,
• Protecting the submitted information from unauthorized access using a strong encryption algorithm
• … and much more
  

Related posts:
🔗 A Deep Dive into Hong Kong’s New AML Guidelines for VASPs: Part I
🔗 A Deep Dive into Hong Kong’s New AML Guidelines for VASPs: Part II

Nearly four years have passed since the Financial Action Task Force (FATF) recommended virtual assets service providers comply with the Travel Rule. 

To this date, compliance with this new AML regulation has varied across the industry. To assess the global state of Travel Rule compliance, Notabene conducts a yearly survey to gain a comprehensive understanding of the industry's efforts to comply with the newest AML regulation.

The 2023 report finds that there has been major adoption of the travel rule in the past year, with 84% of respondents already complying or planning to by the end of the year. However, of those who are complying, there is a big variation in the levels of compliance. 37.5% of companies are only performing the travel rule post-transaction, failing to fulfill the requirements set forth by the Financial Action Task Force (FATF).

Key findings:‍

2023 is the year of Travel Rule compliance

The survey found that most of the respondents (84%) are complying or plan to comply with the Travel Rule by the end of 2023, with nearly half having achieved compliance or targeting it by Q2 2023, and the number of VASPs complying has doubled compared to the previous year, indicating that 2023 will be the year of Travel Rule adoption.

Travel Rule compliance is becoming increasingly global

A significant portion of companies (almost 25%) need to comply with the Travel Rule in more than one jurisdiction, indicating a growing global reach, and highlights the need for a solution to cross-border challenges. The diverse respondent sample from around the world reinforces the need for regulators to develop a unified approach to Travel Rule compliance that meets the needs of the entire industry.

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The Americas and APAC are leading Travel Rule compliance

A similar percentage of respondents from the Americas and Asia-Pacific (APAC) are either fully or partially compliant with the Travel Rule, with APAC having twice as many "fully compliant" responses due to the comprehensive regulatory environment in the region. Meanwhile, Travel Rule adoption began later in the Americas, but

all respondents

from the Americas plan to be compliant by the end of 2023, showing a high level of commitment to compliance in the region.

Enter your information in the form to receive the study in your inbox.

In 2017, Gibraltar created a regulatory framework for blockchain and distributed ledger technology, making it the first country to do so. Since March 22, 2021, the Proceeds of Crime Act 2015 (Transfer of Virtual Assets) Regulations 2021 (POCA) has been in effect, implementing the crypto Travel Rule. Gibraltar's VASPs had 18 months to comply with the regulation.

Download the guide to learn important information about cryptocurrency regulations in Gibraltar, including:

• The timeline of regulatory action in Gibraltar
• Self-hosted wallet requirements for Gibraltar VASPs
• The minimum threshold that triggers Travel Rule compliance
• … and more

In its AML/CTF Guidelines for SFC-licensed VASPs, Hong Kong’s Securities and Futures Commission (SFC) outlined criteria to determine whether the Travel Rule solution provider enables VASPs to comply effectively and efficiently. This downloadable guide compares these criteria with Notabene's Travel Rule solution, SafeTransact.

Download your copy to learn how Notabene's SafeTransact meets and exceeds Hong Kong's requirements, including:

• Pre-transaction information sharing
• Counterparty identification and due diligence
• Protecting the submitted information from unauthorized access using a strong encryption algorithm
• … and much more

Related posts:

🔗 A Deep Dive into Hong Kong’s New AML Guidelines for VASPs: Part I

🔗 A Deep Dive into Hong Kong’s New AML Guidelines for VASPs: Part II

In February 2022, the Government of Dubai enacted a new law, creating the Virtual Assets Regulatory Authority (VARA) to oversee virtual assets and related service providers. A year later, in 2023, VARA launched a set of regulations and 13 rulebooks, including the Compliance and Risk Management Rulebook.

The Compliance and Risk Management Rulebook provides a comprehensive regulatory framework for Dubai’s virtual assets, covering licensing, customer due diligence, risk management, and Crypto Travel Rule compliance.

Download the guide to learn important information about cryptocurrency regulations in Dubai, including:

• The minimum threshold that triggers Travel Rule compliance in Dubai
• The counterparty due diligence requirements for Dubai VASPs
• VARA's stance on the sunrise issue
• Self-hosted wallet requirements for Dubai VASPs

In April 2022, the JVCEA introduced the Travel Rule in Japan. Japan’s Financial Services Agency (FSA) is currently creating amendments to the Act on Prevention of Transfer of Crime Proceeds (APTCP) to specify crypto Travel Rule requirements and will launch a public consultation and announce the effective date.

Download the guide to learn important information about cryptocurrency regulations in Japan, including:

• Crypto AML regulations in Japan
• Japan's Travel Rule enforcement date
• Originator and Beneficiary customer data requirements
• … and much more

The UK government has taken an innovative approach to regulating cryptoassets and stablecoins by working with industry experts and regulators to develop an evidence-based regulation plan.

Download the guide to learn important information about cryptocurrency regulations in the UK, including:

• AML crypto regulations in the United Kingdom
• The date the Crypto Travel Rule went into effect in the United Kingdom
• The grace period for Crypto Travel Rule compliance in the United Kingdom

and much more.

The Crypto Travel Rule 101 Guide intends to answer general, fundamental questions concerning best practices for compliance with new FATF regulations. It is not meant to be comprehensive and does not replace or supersede the regulations.

Download the guide to learn critical information on the following:

• The critical components of Crypto Travel Rule compliance
• Jurisdictional differences, including enforcement dates, required originator and beneficiary information, varying thresholds that trigger compliance, and methods of dealing with transactions to/from self-hosted wallets
• Why the FATF applied the Travel Rule to virtual assets
• VASPs, who they are and who they aren’t, including NFTs, DeFI, and Stablecoin issuers
• How AML and KYC frameworks function in the crypto industry
• … and much more.

The Swiss Financial Market Supervisory Authority (FINMA) applied the Anti-Money Laundering Act to VASPs and clarified it as part of the latest update to the FINMA-AMLO legislation (Article 10). Additionally, it published guidance covering the Travel Rule on August 26th, 2019, which went into effect on January 1st, 2020.

Download the guide to learn important information about cryptocurrency regulations in Switzerland, including:

• AML crypto regulations in Switzerland
• The date the Crypto Travel Rule went into effect in Switzerland
• The grace period for Crypto Travel Rule compliance in Switzerland

and much more.

Estonia was the first to begin issuing crypto licenses in 2017, granting upwards of 4,000 licenses. In 2020, Estonia’s crypto regulator changed from the Ministry of Interior Affairs to the Ministry of Finance’s Financial Intelligence Unit (FIU). The FIU found illegal money was moving through shell companies registered in Estonia.

On March 15, 2022, amidst the war in the Russian-Ukraine conflict, the Estonian regulator implemented Travel Rule quickly, with the enforcement date just three months behind on June 15, 2022, creating the quickest turnaround for Travel Rule enforcement in history.

Download the guide to learn critical information about cryptocurrency regulations in Estonia, including:

• Are there AML crypto regulations in Estonia?
• Is the Crypto Travel Rule mandated in Estonia?
• When does the Crypto Travel Rule go into effect in Estonia?
• Does Estonia permit a grace period to comply with the Crypto Travel Rule?
• … and much more!

About Luno

Luno is a leading global cryptocurrency company on a mission to put the power of crypto in everyone’s hands. Luno’s team of 1000+ people has a presence in more than 40 countries, including regional hubs in the US, Europe, APAC, and Africa. In 2022, Luno has successfully reached 10 million customers and counting. For crypto to reach the masses, it’s crucial for customers to have access to safe and regulated platforms like Luno.

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The Challenge

Singapore has a stringent crypto regulatory environment where licenses are given out only to players that meet the high bar set by the MAS. As a key criterion to obtain the license, DPT Service Providers must demonstrate how they comply with the Travel Rule provisions introduced by the MAS.

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The Solution - Q&A with Tamsyn Harrison

Luno began looking for a Travel Rule solution that best fitted their needs in 2019 and onboarded with Notabene in January 2021. Download the customer success story today to read the full Q&A featuring Tamsyn Harrison, Senior Legal Counsel at Luno, who led the Travel Rule implementation.

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Q: What was the trigger that sent Luno searching for a solution?

A: The Singapore Payment Services Act (PSA) was passed by Parliament in January 2019 and came into force in January 2020. The framework requires full compliance with the Travel Rule in order to obtain a license to operate as a DPT Service Provider. Knowing that this would likely be the biggest obstacle in getting approval, we set to work on exploring solutions that would integrate as seamlessly as possible into our customers’ experience. Since then, several other countries have followed suit by introducing the Travel Rule.

Q: What were the consideration criteria? 

A: We considered several solutions, each solving the exchange of Travel Rule information in different ways. The key consideration criteria included: (i) the technical capabilities of the chosen protocol; (ii) the security of information exchanged; (iii) interoperability with other solutions and (iv) the impact of the integration on customers’ experience. We felt that Notabene best met these criteria. 

In addition, Notabene’s holistic approach to Travel Rule compliance also sets it apart. While other solutions solve only the information-sharing aspect of the Travel Rule, we felt that Notabene’s compliance platform and its added features offered a more meaningful experience for our Compliance Team.  

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Q: What are your favorite features of the Notabene product? 

A:

• ‍Additional integrations

Notabene integrates with sanction screening and blockchain analytics tools to provide a more comprehensive service.

• ‍User-friendly UX

The easy-to-understand UX saves time, allows for speed of implementation, and increases productivity. 

• ‍Multi-entity functionality 

Notabene’s multi-entity support helps segment our Travel Rule compliance and reporting for each of our entities (i.e. Luno Singapore, Luno Malaysia, etc). 

• ‍Counterparty reachability and support 

By leveraging blockchain analytics tools to identify a counterparty virtual asset service provider (VASP), Notabene allows Luno to interact with an extensive network of counterparties. Further, by maintaining a comprehensive VASP Directory with verified VASP data, Notabene allows Luno to perform VASP due diligence on those counterparties.

• ‍Sunrise plan

By making its free Sunrise Plan available to any VASP, counterparties do not need to become full, paying Notabene clients for Luno to interact with them. This is very useful for overcoming interoperability issues where, for example, the counterparty VASP using a different Travel Rule solution or has not yet implemented a solution. 

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Q: What else does Notabene do to support the Luno team? 

A: 

• ‍Industry voice 

As one of the key industry leaders, the Notabene team contributes to developments from the FATF and relevant regulators. In June 2022, Notabene provided an excellent collaboration opportunity for its customers to interact with EU lawmakers in the final approval stages of the Transfer of Funds Regulation. 

• ‍Collaboration and support 

Notabene works closely with a  number of our teams, including Legal, Compliance, and Product. The team was very familiar with Singapore’s application of the Travel Rule and are knowledgeable about the nuances which apply when requirements are introduced in other countries.

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Q: How does Luno explain Travel Rule changes to customers?

A: We’ve been very conscious that the Travel Rule introduces significant changes for customers and providing customer education and support has been a key priority from the outset. We explain the Travel Rule UX changes to our customers through close-touch product guidance, e.g., contextual help as they proceed through the new flow. Additionally, we provide support across various channels, e.g., links to in-depth help articles, blogs explaining the rationale for the Travel Rule, as well as increased customer support.

As crypto regulations emerge alongside the rise of global fraud, cryptocurrency regulatory software provider Notabene, AML provider Coinfirm, and eKYC™ Identity Verification platform Authenteq put together three critical case studies of the regulatory landscape.

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Download it now for original data, research, and case studies on pressing topics at the intersection of cryptocurrency and crime, including:

• Coinfirm’s Analysis of the Hydra Darknet Market and Storj Protocol
• Regulatory landscape and law enforcement action against darknet markets
• Blockchain AML analytics deployed on Hydra darknet market flows
• How eKYC, Crypto and Blockchain are transforming Real Estate and Prop Tech
• How tokenizing Real Estate makes KYC a necessity
• Tokenizing Real Estate transactions
• Significant benefits of eKYC for Prop Tech
• How VASPs can stop transactions to sanctioned individuals
• And more!

2021 was the year crypto transactions had mainstream adoption–2022 is the year of crypto regulations being enforced to keep transactions safe. New regulatory requirements have become the latest disruptive force that senior-level executives need to consider when making important decisions regarding business growth.

In Nov 2021, crypto’s total market cap surpassed $3T for the first time, having grown 5-fold over one year. With the influx of institutional players and broad adoption of new technologies in DeFi and NFTs, we expect that market to continue growing fast in coming years.

As crypto transactions move beyond speculative traders and technology enthusiasts into cross-border payments and capital market structures, the Financial Action Task Force (FATF) relegated regulations like the Crypto Travel Rule to mitigate money laundering and terrorist financing. FATF’s Travel Rule requires any participating financial institutions in a transaction to exchange relevant beneficiary and originator KYC information.

To explore how the Travel Rule is presently being rolled out in the crypto and financial services industries, Notabene ran a survey to gauge global compliance readiness and gain a better understanding of the primary pitfalls to compliance.

The survey was conducted in October 2021, with 56 crypto businesses and financial institutions participating. The below report includes the survey results, as well as covers the latest state of enforcement by jurisdictions.

The results show that financial institutions and cryptocurrency companies are taking Travel Rule compliance seriously but are at varying states of readiness–largely dependent upon their primary operating jurisdiction.

Report highlights

The majority of respondents (67%) plan to become fully compliant by the end of Q2 2022. Yet more than 60% have not started implementation yet and remain in the research phase.

52% of respondents cite legal uncertainty and the sunrise period as their biggest hindrances to Travel Rule adoption (breakdown respectively of: 27%, 25%).

The second largest factor contributing to non-compliance being a lack of resources, with 23% citing a lack of technical resources, and 9% citing a lack of compliance/legal resources.

Close to one-third of companies (31%) fully or partially comply with the Travel Rule.*

*We define fully complying as sending and responding to Travel Rule data transfers. Partially complying means a company is sending or responding to Travel Rule data transfers.

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