Game Guiding Journey in Travel
In the ever-evolving world of virtual assets, compliance with Anti-Money Laundering (AML) and Counter Financing Terrorism (CFT) regulations is paramount. One such regulation, the Travel Rule, has been extended to the virtual asset sector by the Financial Action Task Force (FATF). This rule, first introduced in 2019, requires Virtual Asset Service Providers (VASPs) to collect, verify, and transmit specific identifying information about the sender and receiver of virtual asset transactions when the value exceeds a defined threshold.
The Travel Rule: A Closer Look
The Travel Rule aims to enhance transparency, curb money laundering, and combat the financing of terrorism by ensuring that critical transactional data "travels" with the virtual asset transfer across platforms and jurisdictions. Key details and implications of the Travel Rule for VASPs include:
- Scope and Threshold: FATF requires that sender and receiver information be shared whenever virtual asset transfers exceed a monetary threshold (e.g., Deribit applies it from about USD 953 / AED 3,500 upwards).
- Information Required: Typically includes the originator's and beneficiary's names, account numbers, VASP details, and transaction amounts.
- Licensing and Compliance: FATF recommends all jurisdictions license VASPs to ensure compliance with AML and CFT obligations, including the Travel Rule. Compliance involves adhering to customer due diligence (CDD), transaction monitoring, and suspicious activity reporting.
- Global Adoption and Enforcement: As of mid-2025, about 99 jurisdictions covering roughly 98% of global VASP activity have adopted legislation mandating Travel Rule compliance. However, effective enforcement and supervision occur in only about 40% of these, highlighting gaps in regulatory oversight.
Challenges and Solutions
Implementing the Travel Rule poses several challenges for VASPs, including data fragmentation, cross-border variations, technology limits, and crypto-specific issues. These challenges lead many VASPs to rely on manual or partial data processes, increasing compliance risks.
To address these challenges, Sumsub offers a comprehensive solution designed to help VASPs navigate AML compliance in various countries implementing the Travel Rule. The service includes checks for sanctions, watchlists, and adverse media related to the Travel Rule, ensuring secure data transmission and reception in the context of the Travel Rule. Moreover, Sumsub's solution is designed to aid VASPs in detecting VASP-to-VASP payments, identifying and verifying the receiving VASP (Counterparty Due Diligence), and maintaining a flawless reputation for VASPs.
Staying AML Compliant with Sumsub
By using Sumsub, users can ensure they are AML compliant in jurisdictions where the Travel Rule applies to crypto transfers. The service, named "traveling around the world" to learn facts about different countries and the implementation of the Travel Rule, offers an easy-to-use solution for VASPs to meet their regulatory obligations.
In a world where regulatory expectations are constantly evolving, Sumsub's Travel Rule solution provides VASPs with the tools they need to stay compliant and build customer trust. As the FATF continues to refine supervision guidelines for Travel Rule enforcement and future reports targeting stablecoins, decentralized finance (DeFi), and offshore VASPs are expected to further shape compliance expectations through 2026, Sumsub's solution will continue to adapt and evolve to meet the needs of the virtual asset industry.
- To maintain AML and CFT compliance in the digital asset sector and ensure seamless data transfer across platforms and jurisdictions, Virtual Asset Service Providers (VASPs) might benefit from adopting technology solutions such as the one offered by Sumsub.
- As the Financial Action Task Force (FATF) continues to refine supervision guidelines for Travel Rule enforcement and extends regulations to include stablecoins, decentralized finance (DeFi), and offshore VASPs, technology advancements will play a crucial role in helping VASPs keep pace with the ever-evolving business landscape and comply with finance-related regulations.
