Travel rule
Also called crypto travel rule, wire transfer rule, funds transfer rule
The travel rule requires banks, payment firms and crypto firms to send identifying details of the payer and payee along with a transfer. The receiving firm checks the details are present and screens them. It comes from FATF Recommendation 16 and applies to wire transfers and, since 2019, to virtual asset transfers.
How it works
When a customer sends funds, the originating firm attaches the payer's name, account or wallet number and address or identifier, plus the payee's name and account. For crypto, the details travel through a separate messaging protocol between the two providers. The beneficiary firm checks the data is complete, screens it against sanctions lists and decides whether to accept, return or hold transfers with missing details.
Without payer and payee data, a transfer cannot be screened or traced. The travel rule lets sanctions and AML checks work across institutions. In crypto, it ended anonymous transfers between regulated providers. The EU applies it to every crypto-asset transfer with no minimum amount. The US applies it to transmittals of $3,000 or more. The UK has applied it to cryptoasset firms since September 2023.
The rules
Requires payer and payee information with all fund and crypto-asset transfers, with no minimum threshold for crypto.
Payment service providers and crypto-asset service providersRequires cryptoasset businesses to collect, verify and share originator and beneficiary information on cryptoasset transfers.
UK cryptoasset exchange providers and custodian wallet providersRequires transmittor details to travel with transmittals of funds of $3,000 or more.
Banks and non-bank financial institutionsSets the global standard for originator and beneficiary information on wire and virtual asset transfers.
Banks, payment providers and virtual asset service providersCommon questions
Does the travel rule apply only to crypto?
No. It began with bank wire transfers. FATF extended it to virtual asset service providers in June 2019, which is why it is now most associated with crypto transfers.
Is there a minimum amount for the travel rule?
It depends on the jurisdiction. The EU has no threshold for crypto-asset transfers. The US rule applies at $3,000. FATF standards allow a de minimis threshold of USD or EUR 1,000 for virtual asset transfers.
What happens if travel rule data is missing?
The receiving firm decides, on a risk basis, whether to reject, return or hold the transfer and ask for the missing details. Repeated failures by a counterparty can lead to restricting or ending the relationship.
