In one sentence
The travel rule is an anti-money-laundering requirement that makes service providers send identifying information about the sender and the recipient along with a transfer of crypto-assets, as banks already do for wire transfers.
How it works
The Financial Action Task Force (FATF), the international body that sets anti-money-laundering standards, has long required banks to include originator and beneficiary information in wire transfers. In June 2019 it extended its standards to virtual asset service providers, including this obligation, which became known as the travel rule.
The information typically includes the sender's name, the account or address used, and further identifying details such as an address or a date of birth, together with the recipient's name and account or address. Under the FATF standards, countries may choose not to apply the full requirements below 1,000 US dollars or euros.
The EU implemented the rule through Regulation (EU) 2023/1113, which has applied since 30 December 2024. Its version has no minimum amount for transfers between crypto-asset service providers. For transfers above 1,000 euros to or from an address the customer holds personally, the provider must also take steps to check that the customer owns or controls that address.
The obligation falls on providers: a person moving units between two addresses they hold personally, with no provider involved, is not covered. The data does not go onto the blockchain. Providers exchange it with each other through separate, secure messaging systems, and data-protection law applies to it.
A simple example
A customer of provider A sends units to a customer of provider B. Alongside the on-chain transfer, A sends B a message with the sender's and the recipient's details. B checks that the information is complete before making the units available. If details are missing, B may ask for them, hold the transfer or reject it.
Common misconception
Misconception: The travel rule writes my name onto the blockchain for everyone to see.
In fact: The blockchain record looks exactly the same as before. The identifying information travels privately between the two providers, outside the chain.
Where you meet it
- Forms at regulated providers that ask for the recipient's name.
- FATF reports on how countries implement the standard.
- EU rules alongside MiCA.
- Privacy notices of providers, which explain how transfer data is shared and kept.
Related cards
Sources
This card explains a technical concept for general education. It is not a recommendation to acquire, sell or hold any crypto-asset, and it is not financial advice.