Travel Rule

The Travel Rule is a regulatory requirement that obligates financial institutions and virtual asset service providers (VASPs) to share specific customer information when transferring funds or virtual assets above a defined threshold. Originally introduced under the Bank Secrecy Act (BSA) in the United States, it has since been reinforced globally by the Financial Action Task Force (FATF). The rule requires transmitting both the originator’s and beneficiary’s details such as name, account number, and address to ensure transparency and traceability in cross-border transactions.For banks, fintechs, and crypto exchanges, compliance with the Travel Rule is a critical part of AML frameworks, helping regulators detect and prevent money laundering, terrorist financing, and other illicit activities. As digital assets gain prominence, Travel Rule adoption has become a global priority, with jurisdictions mandating its implementation across traditional and virtual financial ecosystems.