Contents

Overview

Implementation of the EU Travel Rule builds upon the following documents issued by EU regulators:

1. Regulation (EU) 2023/1113 of the European Parliament and of the Council of 31 May 2023 on information accompanying transfers of funds and certain crypto-assets and amending Directive (EU) 2015/849 (Text with EEA relevance)

2. Guidelines on information requirements in relation to transfers of funds and certain crypto-assets transfers under Regulation (EU) 2023/1113

Both of the following documents are in English for simplicity. If you prefer to read the regulation in another language, please use the links provided above.

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.

Key concepts in EU regulation

1. CASP

   1. CASP and VASP are interchangeable terms in the EU regulation.

   2. As a Cryptocurrency ATM Operator, you are a CASP.

2. CASPs exchange information about the transaction parties by sending PIIs (Personally Identifiable Information, aka Envelopes) via the Travel Rule Provider networks.

3. Where does the Travel Rule apply?

   1. The Travel Rule applies in any crypto-currency transfers where at least one of the parties is a CASP.

      1. An Exchange, e.g. Binance is a CASP, as is your Organization.

   2. The TR doesn’t apply to transfers from one self-hosted wallet to another self-hosted wallet.

4. Proof of ownership for transactions with a value exceeding €1000 EUR.

   1. 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.

      1. The requirement is unnecessary for smaller transactions.

5. 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.

6. The Envelope needs to be sent to the counterparty CASP before - or at the time of - the transfer. Not after.

7. When the CASP is transferring cryptocurrency to a self- hosted wallet, the Envelope needs to be stored and archived by the CASP.

8. Envelopes need to be retained in your archive for at least for 5 years.

9. 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.

10. VASPs outside of the EU should be considered as CASPs too.

11. The EU plans to review its Travel Rule measures on self-hosted wallets in 2026.

Example Travel Rule Scenarios

Practical Recommendations for Operators

1. We recommend that you reinforce that the Payee & Payer are the same person in your Terminal’s Terms and Conditions.

   1. This reduces the risk that the customer is sending coin to a scammer.

   2. Additionally, your customer is not required to fill additional information about the Payee which can be time consuming and a barrier to usability.

2. We recommend that you force customers to be issued a PDF paper wallet at the BATM for transactions that exceed 1000 EUR.

   1. Currently, most mobile and desktop wallets have not yet implemented a means to perform proof of ownership. You cannot comply if they cannot comply.

3. The Travel Rule Provider network is immature. Be prepared for compliance struggles in 2025.

   1. Travel Rule Providers connect multiple providers into their network. These networks are not interconnected (yet). It will take years for Travel Rule Providers to achieve interoperability.

   2. Expect that counterpart CASPs will not receive your messages and you will not receive theirs.

4. Be discoverable.

   1. Register yourself as a CASP to multiple registrars to be found by other CASPS.

   2. Write your CASP ID on customer receipts including your Organization’s country of origin.

5. Be prepared for authorities to review whether you are archiving PIIs/Envelopes for 5 years.

6. Apply existing KYC measures to ensure that your customers are not avoiding Travel Rule restrictions by performing multiple cryptocurrency transfers below 1000 EUR.

EU Travel Rule implementation Roadmap in CAS

EU Travel Rule implementation is being delivered in multiple stages to our Operators with a focus on minimal effort for you.

1. Version 20241001 - Delivered

   1. PDF paper wallet support has been added allowing operators to test drive a new vehicle for how to send coins to customer self-hosted wallets, with the proof of ownership requirement satisfied.

   2. Releasing PDF support ahead of time gives operators time to customize their PDF wallet templates to better explain to customers how to use them.

      1. See: https://generalbytes.atlassian.net/wiki/x/A4Cf1w

2. Version 20241101 - Delivered

   1. Input Queues were introduced. Input Queues allow operators to review or suspend incoming coin transfers. This feature is an essential tool for KYC review when the PII from the originator’s CASP hasn’t arrived yet.

      1. See: https://generalbytes.atlassian.net/wiki/x/BADR2Q

3. Version 20241201 - Delivered

   1. Added support for scenarios B and C. General Bytes has concentrated on supporting and improving usability for these scenarios first - as it is expected that CASP to CASP Travel Rule Providers will be facing significant interoperability and usability issues at the beginning of 2025.

4. Version 20241201 - Delivered

   1. Added support for customer is declaring that his wallet is unhosted for transactions below threshold (1000 EUR for example).

5. Version 20250101

   1. Added support for scenario A using NotaBene travel rule provider.

   2. Added Extensions API to add your own Travel Rule Provider implementation.

6. Version 20250201

   1. Added support for scenario D,E,F using NotaBene travel rule provider.

7. Version 20250301

   1. Added support for GTR and SumSumb travel rule providers.