UK’s finance ministry to implement FATF travel rules on crypto assets

UK’s finance ministry, HM Treasury, recently declared its intention to implement the FATF (Financial Action Task Force) travel rules on crypto assets’ transactions. The ministry aims to prevent money laundering, illegal transfer of funds, and terrorism funding through this action.

According to the announcement, discussions on the same would be held till October 14 to hopefully execute the legislation by spring 2022.

The ministry issued a document explaining the ordeal. It said:

“The government has been kept informed of technological developments, such as the development of common data standards and the progress of a large number of software solutions, and considers that the time is now right to begin planning for the implementation of the travel rule.”

FATF’s travel rule

FATF, an international regulatory authority, is a global watchdog organization that aims to prevent money laundering and terrorism financing by establishing well-defined protocols and develop and promote policies at a global level.

The organization’s policies on cryptocurrencies are adopted at various levels around the world and have been subjected to debates and discussions.

According to its rule, both the initiator and the recipient of funds need to be identified.

The document explained that the principles of travel rules should be consistent with the financial industry, irrespective of the mode and technology used to transfer currencies. The requirements would be applied to the cryptocurrency exchange providers and custodian wallet providers, according to the Money Laundering and Terrorist Financing (Amendment) Regulations 2019.

The document said:

“Cryptoasset firms will need to put in place systems for ensuring that personal information of the originator and beneficiary of a cryptoasset transfer is transmitted and received alongside the transfer, in an appropriate format.”

Transactions above £1,000 might require a more detailed report on senders and receivers such as their addresses, account numbers, date of birth, etc.

The announcement comes after the European Commission, EU’s politically independent executive branch, announced its drafted measures to adopt the FATF rules on crypto assets.