Travel Rule
Also known as: Funds Travel Rule · FATF Travel Rule · Recommendation 16 · FATF rule for VASPs
A rule requiring whoever transfers value — including crypto-assets — to send the originator's and beneficiary's information along with it, so the data "travels" with the transaction across the chain.
Legal basis
FATF — Guidance on Virtual Assets (Recommendation 16 / Travel Rule)
In the US the Travel Rule predates crypto: under the Bank Secrecy Act, 31 CFR 1010.410(f) requires financial institutions to pass originator and beneficiary information along a funds transfer of $3,000 or more. FATF Recommendation 16 extends the same idea to crypto-assets: when moving assets between service providers (VASPs), each side must transmit the identification of the sender and receiver above a defined threshold — which is why it is called the "travel" rule.
It is what keeps crypto from becoming an anonymous channel between regulated institutions: without it, each exchange sees only its half of the bridge. The technical challenge is exchanging this data securely between VASPs on different systems, and the compliance challenge is applying it to self-hosted wallets, which have no provider on the other side.
Frequently asked questions
What is the Travel Rule in crypto?
It is the requirement — FATF Recommendation 16, and in the US the Bank Secrecy Act's funds-transfer recordkeeping rule — that the originator's and beneficiary's details accompany a transfer above a set threshold. It ensures identity information "travels" with the money, as it already does for bank wires.