FATF Travel Rule
FATF Recommendation 16 - Wire Transfer Rule
International standard requiring VASPs to share originator and beneficiary information for virtual asset transfers.
What is FATF Travel Rule?
The FATF Travel Rule (Recommendation 16) requires Virtual Asset Service Providers (VASPs) to obtain, hold, and transmit required originator and beneficiary information during virtual asset transfers. Originally designed for traditional wire transfers, it was extended to cover cryptocurrency transactions in 2019.
The rule aims to prevent money laundering and terrorist financing by ensuring that virtual asset transfers can be traced. VASPs must implement systems to collect and transmit customer identifying information when transfers exceed applicable thresholds (typically $1,000-$3,000 depending on jurisdiction).
Who Needs FATF Travel Rule?
- Cryptocurrency exchanges
- Virtual Asset Service Providers (VASPs)
- Crypto custodians and wallet providers
- DeFi protocols with centralized components
- Crypto payment processors
Key Requirements
Core compliance areas for FATF Travel Rule
Originator Information
Collect and transmit originator name, account number, and address/national ID/customer ID/date and place of birth.
Beneficiary Information
Obtain beneficiary name and account number for all qualifying transfers.
Counterparty VASP Due Diligence
Verify that counterparty VASPs are registered/licensed and implement adequate AML controls.
Record Keeping
Maintain records of all required information for at least five years.
Threshold Monitoring
Monitor transactions against applicable thresholds and apply requirements accordingly.
Benefits of FATF Travel Rule Compliance
- Regulatory compliance across jurisdictions
- Access to banking and fiat on/off ramps
- Enhanced trust with institutional partners
- Reduced risk of enforcement actions
- Ability to operate in regulated markets
- Foundation for institutional adoption
How PartnerAlly Helps with FATF Travel Rule
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