Travel Rule [2025 Guide]

As of 2025, the regulatory landscape for crypto businesses is undergoing a significant transformation. The Financial Action Task Force (FATF)’s Travel Rule is no longer a theoretical guideline; it’s being actively enforced across the globe. If you operate as a Virtual Asset Service Provider (VASP), it’s time to align your operations and compliance protocols with these updated standards.

Currently, 99 jurisdictions have already implemented or are preparing to enforce Travel Rule legislation. This guide provides essential insights to help your business remain compliant without sacrificing operational efficiency. With solutions like Bitpace’s crypto payment gateway, integrating these regulations into your workflow becomes much simpler.

Understanding the Travel Rule

Origins and purpose

Originally introduced in 1996, the Travel Rule (FATF Recommendation 16) was created to fight money laundering and illicit activity in the traditional banking system. Recognising the growing influence of digital finance, the FATF extended this regulation to the crypto sector in 2019.

At its core, the Travel Rule is based on a simple yet powerful idea: financial transactions with comparable risk profiles should be subject to the same standards, whether they involve fiat or digital currencies. By requiring customer data to accompany qualifying transactions, the rule aims to boost transparency, assist law enforcement in tracking criminal activity, and help regulate the flow of virtual assets more effectively.

Core requirements

As a VASP, you must collect and transmit specific customer details during qualifying transactions. For individual (natural person) transactions, the following information is required:

• Full legal name
• Account number or unique transaction ID
• Physical address
• Date and place of birth

These requirements apply when transaction amounts exceed certain thresholds. The FATF recommends a 1,000 USD/EUR benchmark for mandatory data sharing. However, thresholds may vary by jurisdiction; for example, the U.S. sets the limit at 3,000 USD, while Switzerland mandates compliance for all transactions, regardless of value.

The rule applies to a wide range of activities, including:

• Exchange of cryptocurrencies for fiat
• Exchange between different virtual assets
• Sending or receiving crypto assets
• Custodial services for virtual assets
• Any financial service involving virtual asset offerings

Global regulatory landscape in 2025

United States framework

In the United States, the Travel Rule is enforced by the Financial Crimes Enforcement Network (FinCEN) under the Bank Secrecy Act. If you’re operating a crypto-related business, you must register as a Money Services Business (MSB) and implement an Anti-Money Laundering (AML) programme that meets four key criteria:

• Clearly documented policies and internal controls
• A designated compliance officer
• Continuous AML training for staff
• Independent reviews of your AML programme

When handling crypto transactions over 3,000 USD, you must ensure that both the originator and beneficiary details accompany the transfer. To streamline this process, many prominent U.S. exchanges, such as Coinbase and Gemini, have joined the TRUST network, a collaborative data-sharing system designed to simplify Travel Rule compliance.

European Union: MiCA,TFR, and DORA

The EU’s regulatory environment in 2025 is shaped by the Markets in Crypto-Assets Regulation (MiCA) and the Transfer of Funds Regulation (TFR). These frameworks introduce compliance obligations for crypto firms operating within the bloc.

Firms already regulated under national law benefit from a grandfathering period, allowing them to continue services until July 2026 as they transition into MiCA-compliant licensing.

Beyond financial regulations, the Digital Operational Resilience Act (DORA) also applies. It demands heightened cybersecurity and third-party oversight, especially for firms using cloud services or other ICT providers. Therefore, compliance in the EU isn’t just about meeting AML standards; you also need to demonstrate digital resilience and manage operational risk holistically.

Asia-Pacific variations

In the Asia-Pacific region, regulations vary significantly between jurisdictions:

• Singapore has enforced the Travel Rule since January 2020, with a threshold of 1,500 SGD.
• South Korea introduced its version in March 2022, applying to transactions over 1m KRW.
• Hong Kong rolled out its Stablecoins Ordinance in August 2025, imposing strict AML and counter-terrorism (CTF) obligations.

Due to this regulatory fragmentation, there’s no one-size-fits-all approach. Each country requires a tailored compliance strategy that addresses specific thresholds, technologies, and licensing requirements.

United Kingdom approach

Crypto businesses in the UK have been subject to Travel Rule compliance since September 2023. New regulations introduced in September 2025 make compliance more stringent, including:

• Lowering the threshold for ownership reporting from 25% to 10%
• Requiring fit and proper assessments for stakeholders with significant influence

These updates underscore the UK’s commitment to tightening oversight in line with global best practices.

Technology solutions for compliance

Addressing interoperability challenges

One of the core technical difficulties in complying with the Travel Rule lies in the pseudonymous nature of crypto wallets. You often can’t tell if the counterparty is a regulated VASP or a personal wallet user. Additionally, no universal protocol for data exchange exists, making communication between VASPs difficult.

Instead of waiting for a global solution, the crypto industry has responded by developing several interoperable tools. This market-led innovation reflects the ecosystem’s practical approach to real-world challenges.

Leading Travel Rule protocols

TRUST (Travel Rule Universal Solution Technology): This peer-to-peer, encrypted data-sharing system doesn’t store sensitive data centrally. Used by major players like Coinbase, Circle, and Gemini, it supports secure and compliant transfers.

GTR (Global Travel Rule): Spearheaded by Binance, this network allows over 30 VASPs (as of Q3 2025) to comply seamlessly across jurisdictions.

TRISA (Travel Rule Information Sharing Architecture): This decentralised system verifies VASP identities through a Certificate Authority and enables encrypted, mutual authentication.

OpenVASP: Known for its simplicity, OpenVASP uses standard HTTPS and JSON protocols, making it highly compatible with most systems. It also supports manual review workflows where necessary.

Multi-network strategies

Recognising that no single protocol can serve all regions or compliance requirements, leading firms like Circle are adopting multi-network strategies, using both TRUST and GTR to ensure wide coverage.

Bridge technologies now enable partial interoperability between protocols. For example, the TRISA-OpenVASP bridge enables data sharing between otherwise incompatible systems. These developments, along with API-driven tools, support real-time monitoring, automatic sanctions screening, and secure encryption of compliance data.

With platforms like Bitpace, businesses can integrate these systems into their payment flows without disrupting their operations, ensuring both efficiency and adherence to evolving global standards.

Practical implementation for VASPs

Your obligations as an originating VASP

As a sending VASP, you are responsible for collecting, verifying, and transmitting detailed information before processing any virtual asset transaction. This includes:

• Collecting and confirming both the originator’s and the recipient’s personal data
• Running both parties through sanctions screening tools
• Sharing this data securely with the receiving VASP
• Monitoring transactions in real time for suspicious activity
• Reporting unusual or high-risk patterns to the relevant financial authorities

These measures ensure your institution meets its legal obligations while deterring financial crime.

Your obligations as a beneficiary VASP

As a receiving VASP, you’re equally accountable for ensuring compliance. Your duties include:

• Verifying the accuracy of information sent by the originating VASP
• Retaining all transaction and identity records for at least five years
• Conducting your own sanctions screening of the originator
• Using smart transaction monitoring tools to flag suspicious behaviour
• Enforcing risk-based protocols if incoming transfers lack complete information

Adopting these steps helps ensure that your operations remain both legally compliant and operationally efficient.

Managing unhosted wallet transactions

The Travel Rule generally does not apply to transactions between private, unhosted wallets, as long as they are used for personal purposes. However, when your platform facilitates transfers between hosted VASPs and unhosted wallets (especially if they meet criteria for fund transmission), you are required to comply.

 

Strategic costs and benefits

Setting up a compliant Travel Rule infrastructure isn’t a trivial expense. It requires:

• Dedicated compliance professionals
• Investment in automated systems that manage real-time monitoring and data sharing
• Ongoing staff training
• Regular audits and system reviews to maintain operational standards

Though these costs can be substantial, they provide long-term value. A solid compliance programme enhances your company’s reputation among regulators, institutional partners, and high-value clients. In today’s market, being seen as compliant isn’t just a legal necessity but also a competitive advantage that builds trust and facilitates growth.

Balancing security, privacy, and innovation

Privacy-preserving solutions

One of the biggest challenges posed by the Travel Rule is its requirement to share personally identifiable information (PII), a stark contrast to crypto’s roots in pseudonymity. To address this, the industry has developed privacy-preserving frameworks, such as the TRUST protocol, which enables VASPs to share customer data through encrypted, peer-to-peer systems with no centralised storage.

Platforms like Bitpace integrate such technologies into their crypto payment gateways. This allows businesses to stay compliant without sacrificing customer privacy expectations, offering a modern payment solution that aligns with both regulatory and ethical standards.

Regulatory benefits and risks

On one hand, the Travel Rule greatly improves the traceability of crypto transactions, helping detect and prevent activities like money laundering, terrorist financing, and structuring schemes (e.g., smurfing). With the help of AI-driven behavioural analytics, many compliance systems can now catch complex evasion attempts in real time.

On the other hand, overregulation may drive users away from licensed platforms toward peer-to-peer or decentralised alternatives that fall outside regulatory oversight. To mitigate this risk, it’s crucial for both regulators and industry players to maintain open channels of communication. This collaborative approach can help shape policies that are both effective and practical, preserving innovation while upholding public safety.

Your compliance checklist for 2025

To stay compliant with the Travel Rule in 2025, every Virtual Asset Service Provider (VASP) must implement a structured and proactive compliance programme. Below is a checklist to guide your strategy:

• Business registration: Confirm your legal status and secure all necessary licences in every jurisdiction you operate in.
• AML framework: Establish a comprehensive, risk-based Anti-Money Laundering (AML) policy with a dedicated compliance officer overseeing it.
• Protocol selection: Choose suitable Travel Rule protocols and integrate them into your transaction workflows.
• Customer due diligence: Strengthen your Know Your Customer (KYC) processes and run checks against global sanctions lists.
• Unhosted wallet controls: Implement tools to verify ownership of unhosted wallets when transaction thresholds apply.
• Ongoing monitoring: Use behavioural analysis tools to detect irregular transaction patterns.
• Data retention: Create secure, compliant systems for storing records and streamlining regulatory reporting.

Strategic recommendations

Adopt a multi-network compliance infrastructure

Given the fragmentation among Travel Rule solutions, relying on a single protocol may leave gaps in your global operations. A multi-network strategy ensures interoperability with a wide range of counterparties and jurisdictions, enhancing your global coverage and adaptability.

Go beyond data transmission

Effective compliance isn’t just about sharing data. It’s about managing risk in real time. Combine your Travel Rule implementation with advanced monitoring systems, automated sanctions checks, and anomaly detection engines to stay ahead of evolving tactics used by bad actors.

Plan for regulatory evolution

Compliance costs will continue to rise, but they should be treated as long-term strategic investments. With ongoing developments like DORA in the EU, it’s crucial to maintain a flexible budget and adapt your systems to meet new standards as they arise.

How Bitpace supports your Travel Rule compliance

Bitpace’s crypto payment gateway offers a suite of tools to help you meet all Travel Rule requirements:

• Automated data capture: Instantly gathers all required sender and receiver information with no manual effort.
• Protocol connectivity: Built-in integration with major networks, including TRUST, GTR, and others.
• Advanced monitoring: Real-time transaction surveillance identifies irregularities and alerts you promptly.
• Secure architecture: Encrypted end-to-end communication ensures both regulatory compliance and customer privacy.
• Global configuration: Tailored to fit varying thresholds and rules across different markets and regions.

By using Bitpace, you transform compliance into a strategic advantage, ensuring your transactions are secure, your partners are confident, and your operations are ready for global scale.

Conclusion

The implementation of the Travel Rule signals a pivotal shift in the crypto ecosystem. It marks a transition toward regulatory maturity, aligning digital asset markets with global AML and CTF frameworks.

This evolution doesn’t mean sacrificing decentralised ideals; rather, it provides a foundation for trust, enabling legitimate businesses to thrive and global institutions to participate in the crypto economy with confidence.

With Bitpace’s payment gateway, you gain all the tools you need to comply with the Travel Rule while maintaining operational efficiency and user privacy. Our technology equips your business to scale securely, navigate complex regulations, and lead in a rapidly evolving financial world.

Ready to simplify your compliance journey? Contact Bitpace today and learn how our crypto payment solution keeps your business protected, future-ready, and globally competitive.

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