Crypto asset companies in the UK can now start holding transfers of certain cryptocurrencies in order to comply with the new Cryptocurrency Travel Rule which went into effect on 1 September.
Rules targeting virtual asset service providers have been implemented introduced by the Financial Conduct Authority on August 17, obliging UK-based VASPs to “collect, verify and share information” related to transfers of crypto assets.
If payment is received from a person or entity in a foreign jurisdiction that has not implemented the Travel Rules, the VASP must carry out a “risk-based assessment” of “whether to make crypto assets available to the recipient”.
– Financial Conduct Authority (@TheFCA) August 17, 2023
These Travel Rules were created by the United Nations agency, the Financial Action Task Force, in June 2019. The UK has enacted legislation to start to apply Travel Rules in July 2022.
It attempts to apply Anti-Money Laundering and the Financing of Terrorism rules to activities carried out on the blockchain.
Other countries that have adopted the Travel Rules include the United States, Germany, Japan, Singapore, Switzerland, Canada, South Africa, the Netherlands and Estonia, thereby with Sygna.io.
On June 23, the Financial Action Task Force criticized member countries for not implementing the law sufficiently after a survey revealed that more than half of the countries had taken no action to implement the law.
One look for The March 2022 Financial Action Task Force found that only 29 of 98 jurisdictions at that time met the requirements required as part of travel regulations, and a fraction of those jurisdictions had begun implementing them.
Ian Andrews, director of marketing for blockchain analytics platform Chainalysis, explain in April 2022 that coordinating the exchange of information between VASPs across borders would be “a rather difficult problem” to solve – at least initially.
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