Explore how the new UK travel rule can halt crypto transactions for the crypto firms
Businesses that deal in crypto assets can already start delaying some bitcoin transactions to abide by the new travel rule for crypto that went into effect on September 1.
The Financial Conduct Authority originally announced the regulations aimed at virtual asset service providers on August 17. These regulations mandate that VASPs in the UK “collect, verify, and share information” regarding crypto-asset transfers.
Suppose an inbound payment is received from a person or organization from a foreign country that hasn’t put the Travel Rule into effect. In that case, the VASP must do a “risk-based assessment” before deciding “whether to make the crypto assets available to the beneficiary.”
The same regulation would also apply to Britons sending money abroad.
The Financial Action Task Force, a UN organization, developed the Travel Rule in June 2019. The Travel Rule will be enforced in the U.K. starting in July 2022.
On-chain activities are subject to an attempt to enforce anti-money laundering and counter-terrorist financing laws.
According to Sygna.io, additional nations implementing the Travel Rule include the United States, Germany, Japan, Singapore, Switzerland, Canada, South Africa, the Netherlands, and Estonia.
Following a study that found more than half of member states had not taken any steps toward implementing the rule, the FATF criticized member states on June 23 for their inadequate implementation of the regulation.
Only 29 of the 98 nations surveyed in March 2022 by the FATF had met the conditions outlined in the travel rules, and only a tiny portion of these jurisdictions had begun enforcing them.
According to Ian Andrews, the chief marketing officer of the blockchain forensics platform Chanalysis, organizing the cross-border flow of information amongst VASPs will initially be a “pretty hard problem” to handle.
