Home
News
- 1 Recently, the new travel rule in the UK for crypto came into effect.
- 2 The crypto travel rule aims to stop money laundering and terrorist financing activities.
On August 17, 2023, the Financial Conduct Authority (FCA), a financial regulatory body in the United Kingdom (UK) shared an X (formerly known as Twitter) post that highlights the crypto asset transparency. According to its X post, “the Travel Rule is designed to bring greater transparency to crypto asset transfers, making it harder for criminals to use crypto for illegal activity.”
Crypto Asset Rule in The U.K.
As per the UK’s Travel Rule, it comes into effect and could halt certain crypto transfers. The Crypto Travel Rule in the UK aims to stop money laundering and terrorist financing activities carried out on-chain.
FCA added that “they are setting out their expectations for crypto asset businesses that need to comply with a change in money laundering legislation legislated by the government in July 2022.”
From September 1, 2023, crypto asset businesses in the UK will be required to collect, verify and share information about crypto asset transfers, known as the ‘Travel Rule’.
Furthermore, the Financial Action Task Force (FATF) has called on other jurisdictions to swiftly implement the Travel Rule. It will align practices for crypto asset businesses sending and receiving transactions with those common in other areas of financial services.
The FATF also highlighted the challenges arising from delays in adoption and different timelines for enforcement of the Travel Rule across jurisdictions in June 2023. As a result, FCA has worked closely with industry to provide guidance on “how to comply and what we reasonably expect of firms ahead of other countries following the UK’s position.”
FCA Highlighted its Expectations from Firms
FCA’s expectations for firms include several points that firstly highlighted that the firms will “take all reasonable steps and exercise all due diligence to comply with the Travel Rule. While firms remain responsible for achieving compliance with the Travel Rule, even when using third-party suppliers.”
It also added that “fully comply with the Travel Rule when sending or receiving a crypto asset transfer to a firm that is in the UK, or any jurisdiction that has implemented the Travel Rule. Whereas regularly review the implementation status of the Travel Rule in other jurisdictions and adapt business processes as appropriate.”
FCA also mentioned what will happen when sending or receiving a crypto asset transfer to or from a jurisdiction without the Travel Rule.
However, the UK’s financial regulatory body also added that it will keep its expectations under regular review as global adoption of the Travel Rule develops. Whereas FCA will also communicate any changes accordingly.
Lastly, FCA stated that it further supports crypto asset businesses, as it has been working with the industry, the Joint Money Laundering Steering Group (JMLSG), and HM Treasury (HMT), on guidance to help firms comply with the Travel Rule.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
