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Crypto asset businesses in the United Kingdom could now begin withholding certain crypto transfers to comply with the new Travel Rule for crypto that came into effect on Sept. 1.<\/p>\n
The rules targeting virtual asset service providers were first\u00a0introduced<\/a> by the Financial Conduct Authority on Aug. 17<\/a>, requiring that VASPs based in the U.K. \u201ccollect, verify and share information\u201d relating to crypto-asset transfers.<\/p>\n If an inbound payment is received from a person or entity from an overseas jurisdiction that hasn\u2019t implemented the Travel Rule, the VASP must make a \u201crisk-based assessment\u201d as to \u201cwhether to make the cryptoassets available to the beneficiary.\u201d<\/p>\n The Travel Rule is designed to bring greater transparency to cryptoasset transfers, making it harder for criminals to use #crypto<\/a> for illegal activity.https:\/\/t.co\/kmB6rgMn5e<\/a><\/p>\n \u2014 Financial Conduct Authority (@TheFCA) August 17, 2023<\/a><\/p><\/blockquote>\n The same rule would also apply to Brits looking to send payments outside of the U.K.<\/p>\n The Travel Rule was created by the UN agency Financial Action Task Force in June 2019. The U.K. passed legislation to begin enforcing<\/a> the Travel Rule in July 2022.<\/p>\n It attempts to enforce Anti-Money Laundering and Counter-Terrorist Financing rules on activities carried out on-chain.<\/p>\n Other countries that have adopted the Travel Rule<\/a> include the U.S., Germany, Japan, Singapore, Switzerland, Canada, South Africa, the Netherlands and Estonia, according<\/a> to Sygna.io.<\/p>\n Related: Crypto ads face stricter rules, referral bonus ban by UK FCA <\/a><\/em><\/strong><\/p>\n On June 23, the FATF called out member states for failing to sufficiently implement the rule<\/a> after a survey revealed more than half of them have failed to take any action towards implementing the rule.<\/p>\n A March 2022 survey<\/a> by FATF found only 29 of 98 jurisdictions at the time passed the requirements needed as part of the travel rules and a small subset of these jurisdictions had started enforcement.<\/p>\n Ian Andrews, the chief marketing officer of blockchain forensics platform Chanalysis,\u00a0explained<\/a> in April 2022 that coordinating the exchange of information between VASPs cross-borders will be a \u201cpretty hard problem\u201d to solve \u2014 at least at the onset.<\/p>\n\n