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ARTICLE · 29 NOVEMBER 2024

Virtual Asset Service Providers And The Travel Rule

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The virtual asset "Travel Rule", formally known as the "Financial Action Task Force (FATF) Recommendation 16", requires Virtual Asset Service Providers (VASPs) to share and hold specific customer information.

Cayman IslandsTechnology
Róisín Liddy-Murphy
Róisín Liddy-Murphy
Sarah Howie
Sarah Howie
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What is the Travel Rule?

The virtual asset "Travel Rule", formally known as the "Financial Action Task Force (FATF) Recommendation 16", requires Virtual Asset Service Providers (VASPs) to share and hold specific customer information with recipient institutions when performing transactions involving virtual assets.

The Travel Rule is similar to the requirements imposed on traditional financial institutions in many jurisdictions when performing wire transfers in fiat currency. The Travel Rule is implemented in the Cayman Islands under PART XA of the Anti-Money Laundering Regulation (as revised) (the AMLRs). The Travel Rule aims to enhance transparency and mitigate illicit activities such as money laundering and terrorist financing within the cryptocurrency ecosystem.

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