• UK regulators have enforced the ‘Travel Rule’ in crypto, requiring firms to reveal transaction parties.
• Starting 1 September 2023, UK-based crypto asset businesses must gather, verify and provide information related to crypto asset transfers under the ‘Travel Rule.’
• The ‘Travel Rule’ is an attempt by the UK regulator to combat illegal activities and money laundering.
UK Regulators Enforce ‚Travel Rule‘ for Crypto
The UK has taken a solid step towards ensuring transparency and accountability in its crypto market by implementing the ‚Travel Rule.‘ This rule states that starting from 1st September 2023, all UK-based crypto asset businesses must gather, verify and provide information related to crypto asset transfers.
Purpose of ‚Travel Rule‘
The purpose of this rule is to standardize cryptocurrency transaction practices with other financial sectors. It also serves as an anti-money laundering measure since it allows all transactions to be traced back to their origin and destination, making it difficult for malefactors or money launderers to exploit the system.
Regulations Permit Transfers To Non-Compliant Nations
The Financial Conduct Authority (FCA) has stated that despite this strict regulation, transfers may still be allowed to countries not adhering to global standards. Crypto companies will need check if they can get the required information before making any assets available.
Responsibility Of Firms For Compliance
Cryptocurrency firms in the UK are responsible for compliance with the Travel Rule and must keep track of its adoption worldwide. They should assess risk before transferring any assets into non-compliant nations.
Overall Impact On Crypto Market
Overalll, this rule is expected to have a positive impact on the UK’s crypto market as it brings more transparency and accountability into play while discouraging illegal activities such as money laundering or exploitation of systems.