Crypto Terms: Letter F

What is FATF Travel Rule?

FATF Travel Rule - regulatory guidance regarding sharing information for large-scale crypto transactions.
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Let's find out FATF Travel Rule meaning, definition in crypto, what is FATF Travel Rule, and all other detailed facts.

The Financial Action Task Force (FATF) travel rule is a 2019 update to Recommendation 16 of the regulatory guidance known as the FATF Standards. This particular update touches on battling crypto money laundering (AML) and terrorism funding (CFT).

Based on the FATF, countries must ensure that the domestically operating virtual asset service providers (VASPs) implement measures making it easier to share personal information with the transaction counterparty VASPs while transmitting a transaction that exceeds $1000. VASPs, in this case, refer to cryptocurrency exchanges and custodial platforms.

Such regulatory measures allow governments to collect data from users conducting transactions valued at more than $1000. The information includes the name, account number, and the number of accounts participating in the transactions. Data such as proof of address, identity, or date and place of birth may also be required.

Financial institutions, including VASPs, must share this information with each other, particularly regarding the transactions covered by the regulatory threshold. Financial institutions have to take responsibility for ensuring data accuracy and upkeep. According to the regulation, any financial institution or cryptocurrency business may fall under the VASP category.