In the world of cryptocurrencies, people often talk about decentralization and anonymity. But there’s one rule that somewhat “grounds” this freedom — the Travel Rule. Its purpose is to combat money laundering and terrorism financing. It wasn’t created by crypto enthusiasts, but by regulators.
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Where did the rule come from?
The Travel Rule first appeared back in the 1970s in the U.S., as part of the Bank Secrecy Act. At that time, it only applied to banks. But in 2019, the FATF (Financial Action Task Force) said: “Why not apply this to cryptocurrencies as well?” Since then, the rule has been gradually implemented around the world.
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What’s the essence of the Travel Rule?
It’s quite simple: if you want to send cryptocurrency worth €1,000 or more, your crypto exchange must also send information about you — your name, address, and possibly other details — along with the transaction. This information “travels” with the funds — hence the name Travel Rule. The receiving exchange does the same. As a result, both sides of the transfer are known, making everything more transparent for regulators.
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Why is this necessary?
The idea is straightforward: the more transparent transactions are, the harder it becomes for criminals to hide their activities. According to FATF estimates, billions of dollars are laundered through cryptocurrencies each year.
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Should you be concerned?
If you’re a regular user, have passed KYC (Know Your Customer) verification, and aren’t transferring millions in Bitcoin — you probably have nothing to worry about. The Travel Rule applies only to large transactions and works mostly in the background. However, if you value complete anonymity, you should be aware that the crypto world is becoming increasingly regulated.
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At Bitexpert, we strive not only to comply with all regulatory requirements (minimizing the risk of your transaction being rejected or your funds being “frozen”) but also to ensure convenience and protection for our clients. We won’t request or store excessive information and will guarantee secure processing, storage, and transmission of personal data.