Crypto Industry Seems Willing to Adopt FATF’s Travel Rule: Survey

A new investigation has found that the cryptocurrency industry is eager to comply with the Financial Action Task Force’s (FATF) so-called travel rule, and appears willing to work with regulators to expedite the process.

according to a polls Research conducted by New York-based crypto compliance firm Notabene suggests that by the second quarter of 2022, most of the crypto industry will be in compliance with the travel rule. Currently, the report says that around 70% of respondents are either practicing the rule or planning to complete their compliance by Q1/Q2 2022.

The advent of cryptocurrencies raises a new question in confrontational efforts money laundering and terrorist financing. The FATF has been monitoring this area since 2014 to establish norms to address these new dangers. Since then, the FATF has continued to adjust and clarify its stance on the crypto industry’s AML requirements to keep pace with its rapid development.

FATF Recommendation 16 on wire transfers (also known as the Travel Rule) states that virtual asset service providers (VASPs), financial institutions and other regulated entities in member countries must provide originators to each other in transactions of $1,000 or more and beneficiary details.

The survey surveyed 56 companies from around the world, with 45% located in Asia Pacific, 30% in EMEA and 25% in North America. 13% of respondents have a banking license or are a bank; 86% are crypto-native companies.

According to the survey, about one-third (31%) of companies are in full or partial compliance with regulations. The report also shows that 92% of respondents have internal compliance and legal departments, with 78% of them believing that these teams can ensure that the company acts in accordance with external rules and internal controls.

What is your company’s timeline to achieve full compliance with travel rules? Source: Notabene

related: Governments begin to roll out FATF travel rules globally

On the other hand, half of the respondents pointed to enforcement barriers to travel rule compliance including the sunrise period and legal uncertainty in the most relevant aspects of adoption. According to the report, the majority of respondents (46%) are unaware of the protocols they intend to use for compliance.

This FATF publishes set of rules, including a 2019 travel rule to prevent cryptocurrencies from being used for money laundering and terrorist financing.Japan is the most Jurisdictions that accept travel rules order, together with other Asian countriesfor example South Korea and Singapore.