Crypto industry reacts as FATF Travel Rule comes into effect
The new rules could require UK based crypto asset businesses to withhold some crypto transfers. If an inbound payment is received by a virtual asset service provider (VASP) from a country that has not implements the new rules, the VASP is required to make a risk based assessment around whether to make the assets available to the recipient.
The rule also applies when a UK-based account holder is making a transfer outside of the UK.
In August, the FCA set out its expectations on how UK firms should comply and what it “reasonably expects” of firms ahead of other countries.
The FCA’s expectations include:
• Take all reasonable steps and exercise all due diligence to comply with the Travel Rule.
• Firms remain responsible for achieving compliance with the Travel Rule, even when using third-party suppliers.
• Fully comply with the Travel Rule when sending or receiving a cryptoasset transfer to a firm that is in the UK, or any jurisdiction that has implemented the Travel Rule.
• Regularly review the implementation status of the Travel Rule in other jurisdictions and adapt business processes as appropriate.
When sending a cryptoasset transfer to a jurisdiction without the Travel Rule:
• Take all reasonable steps to establish whether the firm can receive the required information.
• If the firm cannot receive the necessary information, the UK cryptoasset business must still collect and verify the information as required by the Money Laundering Regulations (MLRs) and should store that information before making the cryptoasset transfer.
When receiving a cryptoasset transfer from a jurisdiction without the Travel Rule:
• If the cryptoasset transfer has missing or incomplete information, UK cryptoasset businesses must consider the countries
