FATF Updates Strengthen Regulatory Guidelines

Recently, the FATF’s Plenary approved the latest set of updates to Recommendation 16 (better known as the Travel Rule), marking the movement in the crypto industry that’s shifting in favour of improved security and global financial transparency. With changes planned to be phased in by 2030, the updates aim to bring crypto and traditional finance closer together, tightening anti‑fraud, anti‑money laundering, and counter‑terror financing protocols in cross‑border payments.

The first point of note under the revised guidance is that the payment chain is now clearly defined: compliance responsibilities begin with the business that receives the customer’s transfer instruction. This common-sense clarification means every participant knows exactly when and where to capture and forward essential originator and beneficiary data, which is the second update to mention as information collected on transfers is standardised: the participants’ full name, address and date of birth for all transactions over USD/EUR 1,000 will soon be required, closing the gap between crypto and traditional financial intermediaries.

Tying in with this is the requirement of financial service providers to implement suitable tools to meet fraud- and error-detection standards. VASPs and financial institutions will have to ensure they have the appropriate KYC/AML solutions (such as those provided by Blockpass) before facilitating transfers.

Finally, the FATF has reaffirmed that card-based transactions used to pay for goods and services remain exempt from the Travel Rule, consistent with previous guidance. Transfers not tied to commercial purchases (such as peer-to-peer payments) remain subject to scrutiny under wire transfer standards.

These changes send a clear message that virtual assets must meet the same security and transparency standards as fiat currency; this has a significant benefit for the crypto scene as the ‘same activity, same risk, same rules’ approach builds legitimacy for crypto firms, especially when they interact with businesses in traditional regulated markets. In addition, fraud-protection measures improve user safety and confidence, leading to more rapid and widespread adoption.

With this latest phased implementation and continuing guidance, the FATF highlights the ongoing transformation of the crypto ecosystem from its original ‘Wild West’ days into a legitimate global financial powerhouse. For those that adopt their recommendations, implementing compliance will see a growth in users’ trust, a reduction in fraud and financial loss, and a readier acceptance from a wider range of consumers and businesses alike. Blockpass stands ready to support that journey, helping institutions navigate this latest shift with simple, effective and intuitive solutions.