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If you haven’t read article on Travel Rule please do so before continuing further as you may need to get familiar with some abbreviations and basic concepts of Travel Rule first. |
Content
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History
EU Travel Rule regulation became effective in EU on 1.1.2025. Regulation is independent from the fact whether you are MiCA regulated VASP or not. Main driver behind this regulation was anti-money laundering efforts during the war time in Europe between Russia and Ukraine and the fact that adoption of cryptocurrency and cryptocurrency services in EU will grow when MiCA regulation becomes effective.
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BUY - cash to crypto | |||
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Customer(Payer) inserts cash into the crypto-ATM machine and scans destination wallet address. | |||
Scenario A | BUY - destination address is hosted | This is CASP to CASP transfer. CASP is required to send PII to beneficiary’s CASP. | Example: Customer inserts cash and wants his coins to go to his wallet on Binance exchange. |
Scenario B | BUY - destination address is a self-hosted and amount is < 1000 EUR | This is CASP to un-hosted wallet transfer. CASP needs to perform best effort to check whether the address is not hosted. | Example: Customer inserts 100 EUR in cash and wants his coins to go to his mobile Trust wallet that has private keys in his mobile phone. |
Scenario C | BUY - destination address is a self-hosted and amount is > 1000 EUR | This is CASP to self-hosted wallet transfer. CASP needs to perform best effort to check whether the address is not hosted. Additionally CASP should require proof of ownership/control over the wallet. | Example: Customer inserts 1000 EUR in cash and wants his coins to go to his mobile wallet that has private keys in his mobile phone. CASP will require him to provide cryptographic proof. |
SELL - crypto to cash | |||
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Customer(Payee) selects amount he wants to withdraw on the ATM and prints a redeem ticket. Customer or somebody else sends coins to a wallet address on a redeem ticket that belongs to ATM Operator (CASP). | |||
Scenario D | SELL - originating address is hosted | This is CASP to CASP transfer. CASP is required to receive PII from originating CASP. | Example: Customer sends coins to from his on Binance exchange account. |
Scenario E | SELL - originating address is a self-hosted and amount is < 1000 EUR | This is un-hosted wallet to CASP transfer. CASP needs to perform best effort to check whether the address is not hosted. | Example: Customer sends coins wort of 100 EUR from his mobile Trust wallet that has private keys in his mobile phone. |
Scenario F | SELL - originating address is a self-hosted and amount is > 1000 EUR | This is self-hosted wallet to CASP transfer. CASP needs to perform best effort to check whether the address is not hosted. | Example: Customer inserts 1000 EUR in cash and wants his coins to go to his mobile wallet that has private keys in his mobile phone. CASP will require him to provide cryptographic proof. |
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