Travel Rule

The Travel Rule is a regulatory standard that consists of guidelines specifically targeting financial institutions involved in virtual asset transfers, such as crypto companies, collectively referred to as virtual asset service providers (VASPs).  It is also known as FATF Recommendation 16 created to combat money laundering and terrorist financing, as well as prevent new financial crime opportunities that came along with virtual currencies and digital assets. 

Under this rule, VASPs must collect and share data regarding the sender and the receiver of the virtual asset transfer with the other financial institution or VASP before or during the transaction. The information must be collected when a certain payment threshold is reached. For example, the Financial Action Task Force (FATF) recommends a threshold of $1,000 for virtual asset transfers.

Frequently asked questions


What Data Should VASPs Collect to Comply with the Travel Rule?


The Travel Rule stipulates that all VA transactions reaching a specific threshold must include the identity information of the originator (sender) and beneficiary (recipient). Additional details like transaction reference numbers, beneficiary account numbers, or virtual wallet addresses are required for VA transfers exceeding the threshold. 

The Travel Rule applies to VASPs that have transactions with other VASPs or other regulated entities, such as banks. That means all regulated transactions must include the personally identifiable information (PII) of both the customer and the beneficiary. Additional measures, such as sanctions screening, are also required for VASPs and their counterparty customers.


What is the Origin of the Travel Rule?


What is the Goal Behind the Travel Rule?


When Does the Travel Rule Apply?


Why is Performing Due Diligence on Another VASP Important?


What Companies Fall Under the VASP Category?


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