Travel Rule

The Travel Rule refers to the Financial Action Task Force's (FATF) recommendation 16 from the 2019 updated guidance.

This rule requires virtual asset service providers (VASPs) to share identity details and know-your-customer (KYC) data between them. This exchange of information must take place before transacting together. The goal of travel rules is helping to understand where users send and receive cryptocurrencies.

More simply put, for each transaction, the origin VASP must transfer data about the sender to the destination VASP. And the destination VASP must transfer data about the receiver to the origin VASP.

The FATF assesses progress made by the public and private sectors in the implementation of the Travel Rule every year.

Discover more topics regarding blockchains, crypto, and compliance with our glossary.

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 40 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, and Tron with TRC10 and TRC20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.