U.K. crypto firms are bracing themselves for the implementation of the international anti-money laundering law known as the ‘travel rule’. The rule, set by the Financial Action Task Force (FATF), requires crypto service providers to identify the names of people behind transactions. However, patchy implementation of the rule globally is posing challenges for compliance.
Differing Views on the Travel Rule
The implementation of the travel rule has been met with mixed reactions within the crypto industry. While some see it as an essential step to combat money laundering and improve the reputation of cryptocurrencies, others find it difficult to adapt to crypto’s unique features, such as self-custodied wallets. This has led to a lack of harmonization between jurisdictions and a need for further guidance.
“Crypto firms face challenges as they prepare for the implementation of the travel rule. ”
Calls for Standardization and Guidance
Industry experts are calling for a standardized approach to the travel rule across jurisdictions to avoid cracks in the system that could be exploited by criminals. Lobby groups like UK Finance are urging regulators to provide clearer guidance and leeway for cross-border transfers. With just one week until the U.K. laws take effect, crypto firms are working to navigate the challenges and ensure compliance.
