The crypto travel rule, explained

If an exchange has asked you who you are sending crypto to, or which platform the receiving address belongs to, you have met the travel rule.

Where it comes from

The travel rule began in traditional banking, where wire transfers must carry information about the sender and the recipient. In 2019 the Financial Action Task Force (FATF), the international standard-setter for anti-money-laundering rules, extended its Recommendation 16 to virtual-asset service providers such as exchanges and custodial wallets.

What gets shared

For transfers covered by the rule, the sending provider must collect and pass on details such as:

• The sender's name and account or wallet identifier.
• Identifying information such as an address or ID number, depending on the jurisdiction.
• The recipient's name and wallet identifier.

The receiving provider must check that this information arrives and screen it.

Why rules differ between countries

FATF sets standards, but each country writes its own law. Thresholds vary: FATF suggests applying full requirements above USD/EUR 1,000, while the European Union applies its rules to transfers of any size. Countries have also adopted the rule at different speeds, which can create friction when a transfer crosses borders.

What it means for you

• Expect questions about the destination of a withdrawal, especially to another exchange.
• Transfers to your own self-hosted wallet may require you to confirm that you control the address.
• A transfer can be delayed or returned if the receiving platform cannot accept the required information.

Key takeaways

• The travel rule applies to service providers, not to peer-to-peer transfers between self-hosted wallets.
• Requirements depend on where your exchange is regulated.
• Providing accurate details upfront avoids most delays.