| Note |
|---|
Please familiarize yourself with the Travel Rule here.
|
Content
| Table of Contents | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
History
The EU Travel Rule regulation became effective in the EU on January 1, 2025. The regulation applies whether you are a MiCA regulated VASP - or not. The driving force behind this regulation was AML (anti-money laundering) efforts triggered by the war in Europe between Russia and Ukraine, and the fact that the adoption of cryptocurrency and related services will grow in the EU when the MiCA regulation becomes fully effective.
Overview
Implementation of the EU Travel Rule builds upon the following documents issued by EU regulators:
...
View file name CELEX_32023R1113_EN_TXT.pdf View file name Travel Rule Guidelines.pdf
Key concepts in EU regulation
CASP
CASP and VASP are interchangeable terms in the EU regulation.
As a Cryptocurrency ATM Operator, you are a CASP.
CASPs exchange information about the transaction parties by sending PIIs (Personally Identifiable Information, aka Envelopes) via the Travel Rule Provider networks.
Where does the Travel Rule apply?
The Travel Rule applies in any crypto-currency transfers where at least one of the parties is a CASP.
An Exchange, e.g. Binance is a CASP, as is your Organization.
The TR doesn’t apply to transfers from one self-hosted wallet to another self-hosted wallet.
Proof of ownership for transactions with a value exceeding €1000 EUR.
The CASP is required to obtain the proof of ownership/control from his customer - when the customer claims that he wants to send coins to a wallet that he has under his control.
The requirement is unnecessary for smaller transactions.
The CASP should use their available technical means to verify the customer claim (that their self-hosted wallets are not - in fact - hosted wallets). It is understood that such a check has technical limitations due to the anonymous nature of cryptocurrencies.
The Envelope needs to be sent to the counterparty CASP before - or at the time of - the transfer. Not after.
When the CASP is transferring cryptocurrency to a self- hosted wallet, the Envelope needs to be stored and archived by the CASP.
Envelopes need to be retained in your archive for at least for 5 years.
The CASP is allowed to remember the customer wallet type from previous transactions to avoid asking him whether he uses self-hosted or hosted wallet multiple times.
VASPs outside of the EU should be considered as CASPs too.
The EU plans to review its Travel Rule measures on self-hosted wallets in 2026.
...
Example Travel Rule Scenarios
BUY - cash to crypto | |||
|---|---|---|---|
Customer (Payer) inserts cash into the crypto-ATM machine and scans the destination wallet address. | |||
Scenario ABUYBUY -destination addressis: | Classification: | Example: | |
Scenario A |
| CASP to CASP transfer. CASP is required to send the Envelope to the beneficiary’s CASP. | Example: Customer inserts cash and wants his coins to go to his wallet on Binance exchange. |
Scenario BBUY - destination address is |
| This is CASP to self-hosted wallet transfer. CASP needs to perform best effort to verify confirm 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 CBUY - destination address is |
| This is CASP to self-hosted wallet transfer. CASP needs to perform best effort to verify confirm the address is not hosted. 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 | |||
|---|---|---|---|
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 the BATM Operator (CASP). | |||
SELL - originating address is | Classification | Example | |
Scenario D |
| CASP to CASP transfer. CASP is required to receive PII from originating CASP. | Customer sends coins to you from his Binance account. |
Scenario E |
| Self-hosted wallet to CASP transfer. CASP needs to perform best effort to confirm the address is unhosted. | Customer sends coins worth of 100 EUR from his mobile Trust wallet that has private keys in his mobile phone. |
Scenario F |
| Self-hosted wallet to CASP transfer. CASP needs to perform best effort to confirm the address is unhosted. | 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. |
...