What is the Crypto Travel Rule?

In January 1996 the Financial Crimes Enforcement Network (FinCEN) Advisory presented the original Travel Rule, a rule that requires all financial institutions to pass certain information on to the receiving institution on certain payments and fund transfers.

In 2019 the Financial Action Task Force (FATF) recommended that the Travel Rule be extended to include fund transfers of virtual assets between virtual asset service providers (VASPs). 

How does this impact CoinCorner users?

When you initiate a cryptocurrency withdrawal from your CoinCorner account, our system automatically determines behind the scenes whether the destination wallet address belongs to another regulated exchange or a private unhosted wallet. 

Depending on the destination type and the transfer amount, you may be asked to provide additional details before the transaction can be processed.

Transfers to Other Crypto Exchanges (VASP-to-VASP)

For transfers sent directly to another cryptocurrency exchange, CoinCorner is legally required to securely and immediately transmit basic originator (sender) and beneficiary (recipient) details.

During the withdrawal process, you will be prompted to provide the recipient's details. We must collect and transmit:

• The beneficiary's full name and account number
• The originator’s full name, residential address and account number

Transfers to Private Wallets & Cold Storage (Unhosted Wallets)

An unhosted wallet is a private wallet (such as a hardware device or mobile app) where you or your recipient exercise full control over the virtual assets without using a third-party provider.

Transfers to or from unhosted wallets are subject to a risk-based approach so additional information is not required on all transactions. Where our internal risk assessment deems it appropriate, you may be prompted on-screen to provide the recipient’s name and transaction details for an unhosted wallet transfer before it can be authorised. If the risk profile is low, the transfer may proceed without further inputs. 

What happens during the send process?

Overall, the send process remains straightforward for CoinCorner users.

1. If your transaction triggers a data collection requirement (due to being a VASP transfer or a higher-risk unhosted transfer), a pop-up window will request the recipient's information.

2. For VASP-to-VASP transfers, the name you enter will be verified against the information returned by the receiving platform.

   

3. Upon successful confirmation and verification of the required details, your transaction will be broadcast to the network as normal.
4. If the recipient name you manually provide does not match the data from the receiving VASP, the transaction will fail. No funds will leave your account, and you will be asked to double-check the recipient's information and try again.

Our technical solution for implementing these data-sharing mandates is built to be secure, instantaneous, and fully GDPR compliant.