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FATF Travel Rule

FATF Travel Rule Definition

The FATF Travel Rule is a regulation set by the Financial Action Task Force (FATF) that requires Virtual Asset Service Providers (VASPs) to collect and transfer customer information during transactions. The rule aims to prevent money laundering and terrorist financing in the crypto industry by ensuring transparency in transactions.

FATF Travel Rule Key Points

  • The rule requires VASPs to collect and share information about customers involved in transactions.
  • It is designed to prevent money laundering and terrorist financing in the crypto industry.
  • The rule applies to transactions over a certain threshold, typically $1,000 or €1,000.
  • Non-compliance with the rule can result in penalties or sanctions.

What is the FATF Travel Rule?

The FATF Travel Rule is a regulation that requires Virtual Asset Service Providers (VASPs) to collect and share certain information about their customers when they make transactions. This information includes the sender’s name, account number, location information, and the recipient’s name and account number. The rule is designed to increase transparency in the crypto industry and prevent money laundering and terrorist financing.

Why is the FATF Travel Rule Important?

The FATF Travel Rule is important because it helps to prevent illegal activities such as money laundering and terrorist financing in the crypto industry. By requiring VASPs to collect and share customer information, the rule makes it harder for criminals to use virtual assets for illicit purposes. It also helps to increase transparency and trust in the crypto industry.

Who Does the FATF Travel Rule Apply To?

The FATF Travel Rule applies to all Virtual Asset Service Providers (VASPs). This includes cryptocurrency exchanges, wallet providers, and other businesses that facilitate the transfer of virtual assets. The rule applies to transactions over a certain threshold, which is typically $1,000 or €1,000.

When Was the FATF Travel Rule Introduced?

The FATF Travel Rule was introduced in June 2019 as part of the FATF’s updated guidance for virtual assets and VASPs. The rule was implemented to address the increasing use of virtual assets for money laundering and terrorist financing.

How Does the FATF Travel Rule Work?

Under the FATF Travel Rule, VASPs are required to collect and share certain information about their customers when they make transactions. This includes the sender’s name, account number, location information, and the recipient’s name and account number. The information must be shared with the recipient’s VASP or financial institution. If a VASP fails to comply with the rule, it can face penalties or sanctions.

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