Skip to content
The Travel Rule is nothing new. It is however the European Union’s latest regulation to be applied to the crypto industry, as part of the broader Markets in Crypto-Assets (MiCA) framework. The original Travel Rule was introduced over 20 years ago to oversee traditional financial transactions to increase transparency and security. Its introduction to the crypto space across the EU’s Member States will have the same objective: to enhance clarity and trust among the players and stakeholders in the rapidly expanding European crypto space. The Travel Rule will apply specifically to crypto-asset service providers (CASPs) and virtual asset service providers (VASPs), and will require these businesses (including payment providers, crypto exchanges, wallet providers, etc.) to collect, verify and share sender and beneficiary information for cryptocurrency transactions to enhance security. It will officially come into effect on the 30th of December 2024.
In this article, we explain what the introduction of the Travel Rule into the EU crypto space will involve, how it will affect ForumPay merchants and users, and the benefits of welcoming this measure as a means to enhance security and the legitimacy of crypto payments across Europe.
What is the Travel Rule’s role as part of EU crypto regulation?
The Travel Rule forms part of the Financial Action Task Force’s (FATF) guidelines, which states that all financial institutions (such as banks) collect and share information about the senders and receivers of transactions to help combat financial crime. As of the 30th of December 2024, these rules will be extended to the crypto industry by means of the Transfer of Funds Regulation (TFR), which forms part of the broader MiCA Regulation. Some EU countries have already adopted the rules. Those that haven’t will be obliged to comply by the end of this year.
This regulation requires CASPs to collect and transmit detailed information —including names, account numbers and addresses or ID numbers— about both the senders and beneficiaries of crypto transactions. The Travel Rule aims to standardize anti-money laundering (AML) efforts across all 27 EU Member States and enhance transparency, and will contribute to creating an environment in which crypto payments can become a legitimate and secure payment option.
How does the Travel Rule affect ForumPay and our users?
The implementation of the Travel Rule through the EU’s Transfer of Funds Regulation marks a significant milestone in the maturation of the cryptocurrency industry. By enhancing security, combating illicit activities, and building trust, the Travel Rule is a positive development that benefits all stakeholders. ForumPay is fully committed to helping to foster a more compliant crypto environment, particularly one that makes it easier and safer for crypto users to make and receive crypto payments.
In order to meet the Travel Rule requirements, we will be introducing some intuitive steps to request some additional data points from senders of crypto payments (i.e., consumers), as well as the recipients of payouts and buy orders. We will provide extra information and support for any merchants that need further assistance or clarification on these new steps. The Travel Rule comes as an extra layer of security for ForumPay merchants and helps to increase confidence in crypto payments, adding further to the KYC/AML protection, transparency and security provided through our partnerships with Sum & Sub and Chainalysis.
The benefits of the Travel Rule entering the EU crypto space
Ensuring that all CASPs and VASPs across the 27 EU Member States collect and share information on transaction senders and beneficiaries will enhance security and help prevent the misuse of cryptocurrencies for illicit activities like money laundering and terrorism financing. The increased transparency will foster greater trust among both users who make and receive crypto payments, as well as financial institutions, as it aligns the crypto sector with established financial compliance standards.
A final note on legitimacy
Cryptocurrency acceptance and adoption is increasing at a transformational speed. 2024 has been an incredibly positive year for the crypto space, having witnessed two major approvals for spot Bitcoin and Ethereum ETFs, encouraging huge influxes of capital into these digital assets; new all time highs for both Bitcoin and Ethereum, further boosting the legitimacy of cryptocurrency in society’s collective consciousness and shifting them into the realm of mainstream financial assets; and finally the enforcement of the Travel Rule in the EU crypto space, which, as seen above, will further enhance security and trust among crypto consumers, merchants and users and create a safer environment for crypto payments.
The payments revolution is well and truly underway… Don’t get left behind! Accepting crypto payments has never been safer, or easier, with ForumPay. For more information on how to integrate crypto payments into your business, visit www.forumpay.com, or get in touch with our sales team to discuss any questions you may have.
