The FCA has set out its expectations for cryptoasset firms in complying with the incoming 'Travel Rule'. Under the Rule - which comes into force on 1 September 2023 - UK cryptoasset businesses will typically need to collect information about the originator and beneficiary of a crypto transfer, and share it with counterparty service providers.
The expectations for in-scope cryptoasset business - in particular, cryptoasset exchange providers and custodian wallet providers - include scenario-specific expectations when sending and receiving cryptoasset transfers to and from jurisdictions which do not currently have the Travel Rule in place. The FCA's update comes on the heels of the Financial Action Task Force (FATF) having recently lamented the insufficient progress made by jurisdictions in implementing the Rule.
The FCA's expectations are summarised below.
|General expectations||Expectations when sending a cryptoasset transfer to a non-Travel Rule jurisdiction||Expectations when receiving a cryptoasset transfer to a non-Travel Rule jurisdiction |
The FCA will keep these expectations under regular review as the Travel Rule is rolled out globally. In parallel with the FCA's preparatory work, the Joint Money Laundering Steering Group is also consulting on new guidance to help firms comply with the travel rule. The consultation closes on 25 August and is expected to be finalised later this year.