What is the Travel Rule and how does it impact Fipto users?

What is the Travel Rule, and why is it important?

The Travel Rule is a global regulation designed to enhance transparency in crypto transactions. It ensures that identifying information about the sender and receiver of crypto payments is shared between Crypto-asset Service Providers (CASPs). This is similar to how traditional banks manage information for fiat payments under Anti-Money Laundering (AML) laws.

As crypto adoption grows, regulators aim to align digital assets with traditional financial systems to prevent fraud, money laundering, and other illicit activities. As a registered Virtual Asset Service Provider (VASP) and soon to be Crypto-asset Service Provider (CASP), Fipto is required to comply with this industry-wide regulation.

Who is impacted?

The Travel Rule applies to all Crypto-asset Service Providers (CASPs) and their clients when sending or receiving crypto payments. This framework ensures consistency and maximum security across the entire payment ecosystem.

What changes does the Travel Rule bring?

To comply with the Travel Rule, Crypto-asset Service Providers (CASPs) are required to collect the following details for crypto transactions:

Full Name of the sender/beneficiary.
Geographical Address of the sender/beneficiary.
Wallet Information:
- If self-hosted wallet: A self-declaration of ownership is required.
- If custodial wallet: The name of the CASP managing the wallet.

Why is this information required?

This information is essential to:

Ensure compliance with global anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.
Prevent fraudulent or illicit activities within the crypto ecosystem.
Enable seamless and transparent transaction processing.

How does this impact Fipto users?

As a Fipto user, you may be asked to provide additional information in the following scenarios to comply with the Travel Rule:

1. Beneficiary Creation (Crypto Wallet)

When adding a new beneficiary (wallet address), you will need to provide the beneficiary’s full name, geographical address, and confirm the type of wallet (self-hosted or custodial).

2. Sending Crypto Payments

If you are sending funds to a new or incomplete beneficiary record, Fipto may prompt you to provide any missing details (e.g., wallet type or geographical address) before the transaction can proceed.

3. Receiving Crypto Payments

For incoming payments from an unknown address, Fipto may require confirmation of the sender’s full name, country, and the type of wallet (self-hosted or custodial) to be able to process your payment.

Is my personal data protected and secured?

Absolutely. At Fipto, we implement the highest standards of data security to safeguard your information. Our platform is ISO 27001 certified, a globally recognized standard for managing information security. This certification guarantees that:

Your data is encrypted and stored securely using advanced technologies.
Access to your information is tightly controlled and strictly limited to compliance-related purposes.
Your data will never be used for marketing or any purpose beyond Travel Rule compliance.

In addition, Fipto complies with GDPR and other data privacy regulations to ensure your data is handled with utmost care and transparency. Note that the information you provide is used exclusively to meet Travel Rule requirements; Fipto’s rigorous security measures ensure your transactions remain safe, compliant, and seamless.