Crypto Travel Rule
Compliant Crypto Travel Rule Solutions for Secure Transactions
Coming as a set of guidelines, the exact implementation of the Travel Rule is not set in stone but broadly speaking it requires VASPs to share certain information about parties involved in transactions of more than a given amount ($1000 or EUR1000) in crypto to another VASP or unhosted wallet i.e. when crypto above a certain threshold is transacted through a crypto service provider or to a private wallet.
Whilst the implementations may differ slightly depending on jurisdiction, with the Travel Rule it is integral that the VASPs involved have applied KYC checks for their customers. When crypto transactions above the specified threshold are conducted, the VASP being used by the sender also has to send a set of data alongside the transfer, although this data is not sent or recorded on the blockchain. The additional data required is given as follows:
- the name of the sender.
- the account number of the sender (if applicable).
- the sender’s residential address.
- the sender’s ID number.
- the sender’s date and place of birth.
- the name and account number (if applicable) of the recipient.
When the information is received by the recipient’s VASP, they also have to verify that the information of the recipient is accurate. For unhosted wallets (wallets controlled by individuals not using a crypto service provider for the transaction) in some jurisdictions such as the EU, the sender’s VASP also has to verify that the recipient owns the unhosted wallet. If there is an issue with the verification then the VASP may be required to hold the transaction as ‘pending’ or to return funds to the sender, and to inform the relevant financial authorities.
Given that the specifics of this vary from jurisdiction to jurisdiction, it can be difficult to navigate, particularly with crypto transacting on a global scale; however, the necessity of KYC in all instances is essential. The implementation of regulatory measures has always been inevitable and will protect users as well as encourage the adoption of crypto to a wider audience. For crypto users this means they should be prepared to go through the standard financial industry KYC process when setting up accounts with VASPs, but for VASPs it requires the implementation of KYC checks for those that haven’t yet complied with regulations, and signifies the standard for crypto businesses in the future.
BLOCKPASS
A Complete Solution Portfolio
Blockpass offers a multi-product portfolio that allows merchants to choose the scale of solution that applies to each business and jurisdiction. Whether a business wants only Face Match certification, or if they also require KYC, AML or enhanced SLAs, Blockpass is able to offer a full range of identity verification solutions.