The entry into force of the UK Travel Rule and its impact for certain cryptocurrency transactions

The entry into force of the UK Travel Rule and its impact for certain cryptocurrency transactions

The Crypto Travel Rule, which comes into force on September 1, aims to curb money laundering and terrorist financing activities carried out with digital assets.

La entrada en vigor de la Regla de Viaje en el Reino Unido y su impacto para ciertas transacciones de criptomonedas

Crypto asset companies in the UK could start holding certain crypto transfers to comply with the new Crypto Travel Rule that came into effect on September 1.

Rules targeting virtual asset service providers were introduced by the Financial Conduct Authority on Aug. 17 and ensure that UK-based VASPs (Virtual Asset Service Providers) “collect, verify and share information” related to crypto asset transfers.

If an incoming payment is received from a person or entity from a foreign jurisdiction that has not implemented the Travel Rule, the VASP must perform a “risk-based assessment” on “whether to make the crypto assets available to the beneficiary.”

The Travel Rule is designed to bring greater transparency to cryptoasset transfers, making it harder for criminals to use #crypto for illegal activity.

— Financial Conduct Authority (@TheFCA) August 17, 2023

The same rule would also apply to Brits wishing to send payments outside of the UK.

The Travel Rule was created by the UN Financial Action Task Force (FATF) in June 2019. The UK passed legislation to start apply the Travel Rule in July 2022.

It tries to prevent money laundering (AML) and terrorist financing (CTF) activities carried out on the blockchain.

Other countries that have adopted the Travel Rule include the United States, Germany, Japan, Singapore, Switzerland, Canada, South Africa, the Netherlands, and Estonia, according to

On June 23, the FATF singled out member states for not sufficiently implementing the rule after a survey revealed that more than half of them have not taken any implementation steps.

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A March 2022 survey by the FATF found that only 29 of the 98 jurisdictions at the time met the necessary requirements as part of the travel rules, and a small subset of these jurisdictions had begun implementation.

Ian Andrews, the marketing director of the blockchain analytics platform Chanalysis, explained in April 2022 that coordinating the exchange of information between VASPs across borders will be a “rather difficult problem” to solve, at least at first.

Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.

Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.

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