REGULATIONS

Crypto Travel Rule
in

United Kingdom

🇬🇧
Regulator
Travel Rule required from
Travel Rule regulation still pending


The UK government has taken an innovative approach to regulating crypto assets and stablecoins, by working with industry experts and regulators to come up with an evidence-based plan for cryptocurrencies and other virtual assets. The HM Treasury recently released a consultation, Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Statutory Instrument 2022, that mandated the crypto travel rule. This consultation updated existing UK Money Laundering Regulations rather than attempting to amend the EU Funds Transfer Regulations, making Recommendation 16, Crypto Travel Rule easier and faster to implement.

‍
Is cryptocurrency legal in the United Kingdom?

The United Kingdom considers crypto assets as property, not as legal tender. The British anti-money laundry regulator, the Financial Conduct Authority (FCA), has a pro-crypto stance and pushes for a supportive regulatory environment for digital assets.  

Are there any AML crypto regulations in the United Kingdom?

Yes. On July 22, 2021, HM Treasury released the Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Statutory Instrument 2022. Chapter six of the consultation focuses on transfers of crypto assets.

Is the Crypto Travel Rule mandated in the United Kingdom?

Yes. Chapter 6 of the HM Treasury’s recent consultation, Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Statutory Instrument 2022, laid forth provisions poised to implement the FATF’s Crypto Travel Rule into UK law.

Who regulates cryptocurrency in the United Kingdom? 

The Financial Conduct Authority (FCA) regulates cryptocurrency in the United Kingdom.

FATF Travel Rule requirements in the United Kingdom

Are there licensing or registration requirements for VASPs in the United Kingdom?

Yes. Similar to financial institutions, crypto exchanges that do not have an e-money license must register with the Financial Conduct Authority (FCA) to operate within the UK. UK-based VASPs must adhere to several compliance rules, including KYC (Know-Your-Customer), AML (Anti-Money Laundering), and CFT (Combatting the Financing of Terrorism).

When does the Crypto Travel Rule go into effect in the United Kingdom?

The UK government recently released a consultation that mandated the crypto travel rule in July 2021. The document welcomes comments from stakeholders by October 14, 2021. We suspect that the HM Treasury will release the enforcement date shortly thereafter.   

Read our assessment of the HM Treasury's Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds Regulations to learn more.

Does the United Kingdom permit a grace period to comply with the Crypto Travel Rule?

Yes. The HM Treasury mentions a grace period allowing firms to integrate compliance solutions in chapter 6.8 of the HM Treasury’s ​​Amendments to the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations. 

6.8:

The government acknowledges that the process of integrating these requirements into a firm’s business practices may take time. It is important that new regulations are introduced in a proportionate way, striking the right balance between reducing the harms of illicit finance and supporting innovation that benefits consumers and the economy. It is therefore proposed that firms will be allowed a grace period after the amendments to the MLRs are made, to allow the integration of compliance solutions.

Complying with the FATF Crypto Travel Rule in the United Kingdom

What is the minimum threshold for the Crypto Travel Rule in the United Kingdom?

Full Travel Rule data transfer requirements will apply to all VASP-to-VASP transfers over £1,000. Meanwhile, transfers below £1,000 will still require the collection of less PII. 

6.12:

In line with INR.16 and the approach taken in the FTR, the government proposes that the following information should be required to be sent with a transfer of cryptoassets.

What personally identifiable information is required to be shared for the Crypto Travel Rule in the United Kingdom?

PII requirements for crypto-asset transfers above ÂŁ1,000

Information on the originator:
• Name
• Address
• Account number or unique transaction identifier
• Personal document number
• Customer identification number or date and place of birth.
Information on the beneficiary:
• Name
• Account number/unique transaction identifier

PII requirements for crypto-asset transfers below ÂŁ1,000

Information on the originator:
• Name
• Account number/unique transaction identifier
Information on the beneficiary:
• Name
• Account number/unique transaction identifier

Are there differences in customer PII requirements for cross-border transfers versus transfers within the United Kingdom?

Yes. If all crypto asset service providers involved in the transaction are UK-based, less PII is required.
‍HM Treasury 6.12:

Information on the originator: 
• Account number/unique transaction identifier (subject to a requirement to provide full information to beneficiary crypto asset service provider on request.)
Information on the beneficiary: 
• Account number/unique transaction identifier

What are the non-custodial or self-hosted wallet requirements in the United Kingdom?

There are currently no non-custodial or self-hosted wallet requirements in the United Kingdom.

6.27: Where a transfer is being made from a cryptoassets service provider to an unhosted wallet, the originating provider is not expected to send information to an unhosted wallet, though it should still collect information on the intended beneficiary.

Does customer PII fall within the scope of the UK GDPR?

Yes, customer personally identifiable information (PII) falls within the scope of the UK GDPR. According to chapter 6.22 of the HM Treasury’s latest consultation, UK VASPs must uphold the General Data Protection Regulation when performing Travel Rule transfers. 

6.22:

Personal data received, transmitted, or retained pursuant to these provisions is within the scope of the UK General Data Protection Regulation (GDPR), and crypto-asset service providers will therefore need to process it in line with the requirements in that legislation. 

Why choose Notabene for Crypto Travel Rule Compliance in the United Kingdom?

Notabene’s tools help British VASPs and financial institutions comply with the FATF’s Recommendation 16 “Crypto Travel Rule” as required by the HM Treasury. Our protocol-agnostic solution securely permits VASPs to send, store and maintain required PII for travel rule transactions around the globe. We offer two GDPR-compliant methods to store and manage data as mandated by the HM Treasury.

Last updated
August 23, 2021

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