Travel Rule
A FATF requirement that firms share sender and recipient details on crypto transfers above a set threshold.
The rule borrows from a decades-old banking standard. When a transfer crosses the threshold, which the FATF recommends at 1,000 US dollars or euros, the originating service must pass identifying information to the receiving one.
For exchanges this means building systems to attach names and account numbers to on-chain payments. Self-hosted wallets complicate it, since there may be no firm on the other end to receive the data. Compliance varies widely by country.
Related terms
An intergovernmental body that sets global anti-money-laundering standards, including the crypto Travel Rule, for countries to adopt.
KYC (Know Your Customer)The identity checks financial firms run to confirm who their customers are before opening accounts.
AML (Anti-Money Laundering)The laws and procedures meant to stop criminals from disguising illicit money as legitimate funds.
CustodyThe safekeeping of crypto assets and the private keys that control them, often handled by a regulated third party.