Crypto Transfers Hit With Anti-Money-Laundering Scrutiny Under New Travel Rule

The Travel Rule is an anti-money-laundering requirement that obliges financial institutions and crypto service providers to collect, share, and retain identifying information about both the sender and the recipient of a transfer above a certain value. This rule has been in place for decades, governing bank wire transfers, but it now applies to virtual assets and the businesses that handle them.

The Financial Action Task Force updated its guidance in 2019 to make clear that the Travel Rule should apply to virtual assets and to the businesses that handle them. The guiding principle is 'same risk, same rules': activities that carry similar money-laundering risks should face similar standards regardless of the technology involved.

When a transfer crosses the relevant threshold, the service provider of the sender must share identifying details about that sender with the service provider of the recipient, and in turn receive the beneficiary's details. This information typically includes names, account or wallet identifiers, physical addresses, or identification numbers.