In June 2019, the FATF, the global supervisory authority for money laundering, published its guidelines for dealing with virtual currencies. These include the "Travel Rule". This recommendation, introduced in 2012, prescribes the exchange of customer data between financial intermediaries.
On 21 June, the Financial Action Task Force (FATF), an intergovernmental organization based in Paris, issued its recommendations on combating money laundering and terrorist financing in relation to virtual currencies. In future, so-called "virtual asset service providers" (VASPs) are to operate in accordance with the guidelines issued. The recommendations are strongly based on the regulation of the traditional banking business. Under the so-called "travel rule", transfers of more than USD 1,000 must contain information about the sender and the recipient. This information must be passed on to the receiving financial institution.
Proactive approach
In Switzerland, the Travel Rule is regulated by the Swiss Financial Market Supervisory Authority (FINMA) in Article 10 of the Anti-Money Laundering Ordinance. The financial market regulator demonstrated its proactive approach by being one of the first regulators to publish guidelines on the implementation of the Travel Rule for Virtual Asset Service Providers (VASP) in August 2019. This step strengthened regulatory power and promoted confidence in the blockchain industry.
Many Swiss VASPs have joined forces in the OpenVASP Association to implement it. The first automated, travel rule-compliant Bitcoin transaction between Swiss financial intermediaries took place in August 2020 using the 21 Analytics software solution.
Various initiatives were launched to define compliance standards and protocols to enable the automatic exchange of the required information between virtual asset service providers (VASPs) and "obliged entities". As a result, a need for general standards emerged. The creation of the IVMS 101 standard was an important milestone on the road to global compliance with the Travel Rule.
