Travel Rule (FATF R.16)
The FATF requirement that originator and beneficiary information "travels" with every cross-border transfer above thresholds - extended to crypto under EU Regulation 2023/1113.
What it requires
The Travel Rule, FATF Recommendation 16, requires that financial institutions transmitting funds include accurate originator and beneficiary information with the transfer, and that the receiving institution screen this information. The threshold under FATF guidance is USD/EUR 1,000 for crypto-asset transfers, lower than the traditional USD 3,000 wire-transfer threshold.
EU implementation
Regulation (EU) 2023/1113 (Transfer of Funds Regulation, applicable since 30 December 2024) implements the Travel Rule for both traditional and crypto transfers. Key features:
- Zero threshold for crypto transfers - all transfers are in scope.
- Originator and beneficiary name, address, account or wallet identifier required.
- Specific obligations for transfers to / from self-hosted wallets (verification above EUR 1,000).
Implementation challenges
- The Sunrise Problem - interoperability between Travel Rule solutions (Notabene, TRUST, OpenVASP, Sumsub TRL).
- Self-hosted wallet attribution - verifying the natural person behind an address.
- Data minimisation under GDPR - proportionate transmission of PII.
Regulatory anchor
FATF Recommendation 16 and INR.16; FATF Updated Guidance on a Risk-Based Approach to VASPs (2021, 2023); EU Regulation 2023/1113; MiCA Articles on Travel-Rule alignment for CASPs.