Transak’s Compliance with FCA's Travel Rule

 

What is the Travel Rule?

The Travel Rule was introduced in 2019 by the Financial Action Task Force (FATF), an intergovernmental body responsible for establishing global anti-money laundering protocols. FATF Recommendation #16 proposes a consistent strategy to address money laundering and terrorist financing in the crypto industry.

It requires Virtual Asset Service Providers (VASPs), also known as cryptoasset service providers in the UK, to exchange transaction details and user information—such as sender and recipient identities—for transactions that exceed a specified limit.

Countries around the world implement these guidelines according to their local crypto regulators' expectations. For example, in the UK, regulators have mandated that all crypto transactions are accompanied by, at minimum, the user's name, account number, and beneficiary's details, with additional information required in some cases.

The specific information required, as well as the rule's applicability to transactions involving self-hosted wallets, varies across jurisdictions.

 

What information is shared between parties?

The following data is shared between Virtual Asset Service Providers as a minimum: 

• Sender and recipient names (in Transak’s case, this will be our user’s name)
• Sender's account number (crypto address)
• Account numbers of both sender and recipient.

Additional information might be required by individual regulators in different jurisdictions.

 

Why is the Travel Rule important?

The Travel Rule was introduced to prevent money laundering and terrorist financing within the crypto industry, with the goal of making the crypto community safer for its users. The Travel Rule is also important because:

• It simplifies the process for law enforcement to request transaction data from crypto businesses.
•  It ensures the compliance of crypto enterprises with sanctions.
• It brings crypto into the mainstream by imposing regulations similar to those on non-crypto financial institutions (e.g., banks).

 

How might this affect users?

We do not anticipate any significant impact on our users, as we have taken steps to ensure minimal friction while achieving compliance. Additionally, Transak only allows first-party transactions, which makes the transaction flow much smoother.

Users using custodial wallets to send or receive crypto

If you are using a custodial wallet to exchange fiat for crypto with Transak (on ramp transactions), we will collect and transmit the necessary information for the Virtual Asset Service Provider (VASP) hosting your wallet to process the transaction. The VASP will then verify this information and allow the transaction to proceed. In some limited cases, rejections could occur if there is a discrepancy between the name associated with your account in our systems and the one registered with the receiving VASP.

For users using custodial wallets to exchange crypto for fiat (off ramp transactions), we will ensure the correct information has been received from the VASP hosting your wallet and confirm this against the records we hold. We may put a hold on the transaction if there are discrepancies between the information received from the VASP and the information we hold on you.

Should a transaction be rejected or if we require further information from you, we will promptly notify you via email and suggest. We may also reach out to the receiving VASP for further clarification. 

Users using non-custodial wallets to send or receive crypto

For transfers to and from non-custodial wallets, we will still collect the necessary information, but we will not send any information to the non-custodial wallet provider.

 

How will my personal data be protected?

Transak has partnered with Notabene.id, a leading provider, to ensure Travel Rule Compliance. Notabene is SOC2 Type II compliant and is also compliant with both EU and UK GDPR.