Crypto-asset businesses in the United Kingdom can now start withholding certain cryptocurrency transfers to comply with new cryptocurrency travel rules that come into effect on September 1.
Rules for Virtual Asset Service Providers First introduce The Financial Conduct Authority issued a directive on Aug. 17 and ensured that U.K.-based VASPs would “collect, verify and share information related to the transfer of crypto assets.”
If an inbound payment is received from a person or entity in an overseas jurisdiction that has not implemented the Travel Rule, VASPs must conduct a “risk-based assessment” of whether to provide crypto assets to beneficiaries.
Travel Rule Aims To Increase Transparency In Crypto Asset Transfers, Making It Harder For Criminals To Take Advantage #cryptocurrency conduct illegal activities.https://t.co/kmB6rgMn5e
— Financial Conduct Authority (@TheFCA) August 17, 2023
The same rules apply to Brits wishing to pay outside the UK
The travel rule was developed in June 2019 by the United Nations agency Financial Action Task Force.UK passes legislation to begin implement July 2022 Travel Rule.
It attempts to prevent anti-money laundering (AML) and counter-terrorist financing (CTF) activities conducted on-chain.
Other countries that have adopted travel rules include the United States, Germany, Japan, Singapore, Switzerland, Canada, South Africa, the Netherlands and Estonia, according to Go to Sygna.io.
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On June 23, the FATF condemned member states for failing to adequately implement the rule, with a survey showing more than half of them had failed to do anything to enforce it.
March 2022 poll The FATF found that only 29 of the 98 jurisdictions at the time had passed the required requirements for the Travel Rule, and a small number of those jurisdictions had begun to implement them.
Ian Andrews, CMO of blockchain forensics platform Chanalysis explained By April 2022, coordinating the exchange of information between cross-border VASPs will be a “pretty difficult problem to solve” – at least initially.
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