Understanding TRUST and the Crypto Travel Rule
From September 1 2023, new regulations require the inclusion of beneficiary and originator information for crypto transfers, as part of the Travel Rule Universal Solution Technology (TRUST) and Travel Rule regulations.
Read on the find out how this affects you when transferring your crypto assets through the CL Platform.
What is TRUST and the Travel Rule?
TRUST is a technology solution built by leading cryptocurrency exchanges. It was designed to comply with the Travel Rule requirements while protecting the security of customers’ personal information.
The Travel Rule for Crypto itself imposes an important obligation on all crypto companies. It entails the screening, recording and communication of both sender and recipient information for transactions that exceed a certain threshold designated by the Financial Action Task Force (FATF).
Once a transaction threshold is reached, the virtual asset service provider (VASP) of the sender must securely share personally identifiable information (PII) with the VASP of the recipient, and vice versa. This ensures compliance with regulatory requirements.
Why is this happening?
The Travel Rule is an update to the FATF’s Recommendation 16, concerning cross-border and domestic wire transfers. It states that electronic transfers must be accompanied by information on the sender and beneficiary.
This update was also introduced to address the issues surrounding anti-money laundering (AML) and counter-terrorism financing (CTF) associated with the increasing use of cryptocurrency and to better help law enforcement agencies with crypto laundering criminals.
How does this affect me?
It is essential that the CL Platform complies with the Travel Rule regulations. Therefore, customers are required to provide the following information when transferring crypto assets that exceed a certain threshold, depending on the region.
In general, the Travel Rule regulation will not affect transfers made from Ledger Live to the CL Platform or from the CL Platform to Ledger Live.
- Name of the originator and beneficiary
- The account number of the originator and beneficiary
By complying with these regulations, we aim to enhance security, combat illicit activities, and contribute to a safer and more transparent crypto ecosystem.
Your cooperation in providing the required information is greatly appreciated as we work together towards a more regulated and trustworthy crypto environment.
Definitions
“Beneficiary” — The intended recipient of a crypto asset from the sender.
“Financial Action Task Force (FATF)” — An intergovernmental organisation that combats money laundering and terrorist financing.
“Originator” — The one who owns, and transfers the crypto asset to the beneficiary.
“Personally identifiable information (PII)” — Refers to any type of data that can identify a person, e.g. name, address, phone number, etc.
“Virtual asset service provider (VASP)” — A business that conducts exchanges between virtual assets and fiat currencies, and exchanges between one or more types of virtual assets.
