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Learn more about how MarketGuard AML compliance software can assist a European VASP and CASP with blockchain transaction monitoring and Travel Rule

Travel rule for a VASP

The Travel Rule is a regulatory requirement that mandates Virtual Asset Service Providers (VASPs) to share certain transaction information with each other when conducting virtual asset transactions on behalf of their customers.

In 2019, the Financial Action Task Force (FATF), an intergovernmental organization that sets global standards for combating money laundering and terrorist financing, updated the Travel Rule to include Virtual Assets (VA). This means that VASPs are now required to comply with the Travel Rule when conducting transactions involving virtual assets.

Under the updated Travel Rule, VASPs are required to obtain and transmit the originator and beneficiary information. VASPs must transmit this information to the other VASP involved in the transaction either before the transaction is executed or immediately after. This means that VASPs must have systems in place to collect and transmit this information in a timely manner.

Compliance with the Travel Rule helps to prevent money laundering and terrorist financing by increasing transparency and traceability in virtual asset transactions. It also helps to establish trust between VASPs, which can facilitate the growth of the virtual asset market.