Delays in Implementing Travel Rule
The Financial Conduct Authority (FCA) has announced that crypto firms based in the UK will soon be required to comply with the travel rule starting from Sept 1, 2023. The FCA’s decision aligns with the FATF’s call for swift implementation of the rule, although many countries have experienced delays in adopting and enforcing it.
Main Points:
- Crypto firms in the UK will need to collect, verify, and share information to comply with the travel rule
- The FCA has provided guidance to help firms comply with the rule
- Compliance is expected even when using a third-party supplier
- Funds sent to jurisdictions without the travel rule still require information collection and verification
- Risk-based assessments should be conducted when transferring funds from non-travel rule jurisdictions
The FCA is seeking feedback from crypto asset businesses on the guidance before Aug. 25, 2023.
Hot Take:
The implementation of the travel rule by the UK’s FCA is a significant step towards regulatory compliance in the crypto industry. By requiring crypto firms to collect and verify information, it aims to enhance transparency and prevent money laundering. However, the delays in implementing this rule globally highlight the challenges faced by jurisdictions in aligning their regulations. It will be interesting to see how other countries respond to the FATF’s call and whether they can overcome the obstacles to enforcing the travel rule effectively.
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