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FATF Travel Rule Explained

The FATF Travel Rule (Recommendation 16) is a global standard issued by the Financial Action Task Force (FATF) to combat money laundering and terrorism financing in both traditional and virtual financial systems.

It mandates that certain customer identity information must "travel" with virtual asset transfers — similar to requirements already used for wire transfers in the banking sector.

🔍 What Does the Travel Rule Require?​

When a Business/Institution initiates a digital asset transfer over a regulatory threshold (e.g., $1,000):

Required Data:​

  • Sender (Originator):

    • Name
    • Account number or wallet address
    • National ID or equivalent (e.g., date of birth, address)

  • Receiver (Beneficiary):

    • Name
    • Wallet address or account number

This information must be:

  • Collected and verified before the transaction
  • Transmitted securely to the receiving institution
  • Made available to regulators when required

🌍 Why It Matters​

This rule ensures:

  • Enhanced transparency and auditability
  • Risk-based compliance enforcement
  • Easier detection of illicit finance or fraud

🛠️ How CRYMBO Helps​

CRYMBO Oracle automates compliance with the Travel Rule through:

  • Smart contracts to trigger identity verification
  • End-to-end encrypted APIs for secure PII exchange
  • Jurisdiction-aware AI that recommends required fields
  • Wallet binding to ensure only verified addresses are reported

CRYMBO ensures the identity data is:

  • Encrypted using the receiver’s public key
  • Delivered directly to the authorized counterparty
  • Logged without exposing PII publicly or on-chain

🔐 Designed for Institutions​

  • Compliant with FATF Recommendation 16
  • Compatible with GDPR and ISO data protection
  • Supports both TradFi and DeFi workflows

📚 Learn more via the official FATF site