The State of Crypto Travel Rule Compliance Report 2023
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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).
Find a few key findings from the State of Crypto Travel Rule Compliance 2023 below.
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.
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.
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FAQ
The State of Crypto Travel Rule Compliance Report 2023
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 2023 State of Travel Rule Report survey was conducted from December 2022 - January 2023. Before release, the Notabene team prepared the questions and reviewed them with advisors and industry experts. 69 companies completed the survey, representing broad global coverage.
While significant progress has been made, the data shows that a lot of variation exists in the degree of compliance with FATF guidelines and a likely inclination among VASPs toward adopting a phased roll-out.
The State of Crypto Travel Rule Compliance Report is the first-ever comprehensive global crypto Travel Rule compliance survey. This report demonstrates a transparent understanding of compliance readiness levels and pain points across multiple VASPs in different jurisdictions. Additionally, the results show that the industry would benefit from closer collaboration with regulators when rolling out Travel Rule.
Notabene is crypto’s only pre-transaction decision making platform. We enable customers to identify and stop high-risk activity before it occurs.
Notabene's SafeTransact platform helps financial institutions and crypto businesses unlock their full potential in the digital economy. With a focus on security, privacy, and end-user experience, Notabene customers can use our multi-source data and software to automate real-time decision-making, perform counterparty sanctions screening, identify self-hosted wallets, and complete the smooth roll out of Travel Rule compliance, all in line with global and local regulations.
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