Travel Rule

Sender and receiver information must travel with a transfer.

When money or crypto moves from one financial institution to another, the details about who sent it and who receives it have to move along with it.

Requirement that originator and beneficiary identifying data accompany qualifying value transfers, including crypto. The originator is the sender, the beneficiary is the recipient, and a qualifying transfer is one above the threshold that the rules set.

The rule typically requires institutions to pass along several details:

• Originator information, such as name, account number, and address or other identifying details.
• Beneficiary information, such as name and account number.
• Checks on the data, so receiving institutions can screen it and spot missing information.

The requirement has two main layers:

1. Wire transfers, which the Financial Action Task Force (FATF) addresses in Recommendation 16 for banks and payment providers.
2. Virtual assets, which FATF extends to virtual asset service providers, such as crypto exchanges, through Recommendation 15.

Thresholds differ by place:

• United States: $3,000, under the Bank Secrecy Act, and FinCEN guidance applies it to convertible virtual currency.
• European Union: Regulation (EU) 2023/1113 has applied since December 30, 2024 and sets no minimum for crypto-asset transfers.
• FATF benchmark: FATF permits a minimum threshold of up to 1,000 US dollars or euros.

The Travel Rule sits next to terms that are easy to mix up:

• Anti-money laundering (AML) is the broader set of controls that the rule supports.
• Know your customer (KYC) collects the identity data that the Travel Rule then passes along.
• Virtual asset service provider (VASP) is a business, such as a crypto exchange, that the rule covers.