What is the Travel Rule?

The Travel Rule is an anti-money laundering requirement that obliges Virtual Asset Service Providers to collect and transmit identifying information about the sender and recipient of qualifying crypto transactions. It is formally FATF Recommendation 16. When a VASP sends a transaction to another VASP above the relevant threshold, the identity data behind that transaction must travel alongside it.

The rule was originally created for wire transfers under the US Bank Secrecy Act in 1996. FATF extended it to Virtual Asset Service Providers in June 2019. As of 2025, 73% of FATF member jurisdictions have passed Travel Rule legislation, though enforcement remains uneven.

What information must be transmitted?

The originating VASP must send the following to the beneficiary VASP with every qualifying transfer:

• The originator's full name
• The originator's wallet address or account identifier
• The originator's physical address, or date of birth and national ID number
• The beneficiary's full name
• The beneficiary's wallet address or account identifier

The beneficiary VASP must verify this data on receipt and apply risk-based controls when information is missing or incomplete. Records must be retained for as long as national legislation requires, typically five years.

What are the thresholds by jurisdiction?

There is no single global standard. Thresholds vary significantly across markets.

The EU's zero threshold under the Transfer of Funds Regulation (TFR), effective December 2024, is the strictest among major jurisdictions. In the US, FinCEN has proposed lowering the threshold to $250 for international crypto transfers, though this remains under review as of 2026.

What is the Sunrise Issue?

The Sunrise Issue is the compliance gap created by uneven global adoption. When a VASP in a compliant jurisdiction transacts with one in a non-compliant jurisdiction, the sending VASP cannot get reciprocal Travel Rule data back.

The FATF has published guidance on how to handle this. The typical approach is enhanced due diligence and a risk-based decision on whether to proceed with the transfer.

How is Travel Rule data exchanged?

Travel Rule data travels off-chain between VASPs. The transaction itself settles on-chain as normal. The compliance data is a separate layer entirely.

Common protocols for this exchange include TRISA, Sygna Bridge, VerifyVASP, and OpenVASP. Most use the IVMS 101 standard to ensure consistent data formatting across providers. For any platform connecting multiple VASPs, Travel Rule messaging needs to be designed in from the start, not added as an afterthought.

What about transfers to unhosted wallets?

An unhosted wallet is a self-custodied wallet controlled directly by the user, such as MetaMask or Ledger. These transfers follow different rules than VASP-to-VASP transfers.

In the EU, transfers above EUR 1,000 to unhosted wallets require enhanced due diligence before processing. Rules vary in other jurisdictions. This distinction matters for platforms that support both institutional flows and direct user withdrawals to self-custodied wallets.

How does the Travel Rule differ from KYC?

KYC is the internal process of identifying and verifying a customer before they use the platform. The Travel Rule is the external data-exchange requirement between institutions when a transaction moves between them. KYC produces the identity data. The Travel Rule governs how that data must accompany qualifying transfers to counterparty VASPs.

Both are required as part of a complete compliance risk management framework, alongside OFAC screening and FinCEN reporting obligations. For a detailed breakdown of how the Travel Rule applies to stablecoin and cross-border payment flows, see Due's crypto Travel Rule guide.