The Travel Rule is a global anti-money laundering (AML) and counter-terrorist financing (CTF) regulation that applies to financial institutions, including crypto exchanges and platforms.
It requires these institutions to collect and securely share certain information about the sender and recipient of a transfer.
While this rule has existed for decades within traditional banking, it's now being applied to the cryptocurrency world.
These new steps simply help to ensure that your funds reach the right person, safely and securely, every time.
Why the Travel Rule is important
The Travel Rule is a key component of a global effort to make the financial system safer. For cryptocurrency, it aims to increase transparency and traceability for transactions between different exchanges and platforms.
By requiring platforms to identify both the sender and the recipient of funds, it becomes more difficult for bad actors to use digital assets for illicit activities.
How the Travel Rule benefits you
While the new process might seem like an extra step, it ultimately makes crypto safer for everyone. By sharing transaction data between organisations, the Travel Rule enhances transparency and improves law enforcement's ability to investigate financial crimes.
Benefits for Swyftx customers include:
Better fraud and scam detection and prevention, making it harder for suspicious activity to go unnoticed.
Greater ability to trace fraudulent transactions, which assists authorities in investigating unlawful activity and quickly taking action.
A more legitimate and safer crypto ecosystem, helping to build trust and stability across the industry.
How the Travel Rule impacts Swyftx's procedures
We are required to collect additional information about the sources and destinations of your cryptocurrency transfers. Just as banks require specific details to ensure the legitimacy of transactions, we're now required to implement similar measures.
For withdrawals, we will ask you to provide information about the intended recipient, which will apply to all new and existing withdrawal addresses. You'll only need to provide this information once per withdrawal address, not every time you send funds to that address.
For deposits, you may be asked to provide additional details about the source of your funds.
Providing inaccurate information may result in your transaction being delayed or rejected.
To ensure our approach to the Travel Rule adheres to regulations, we use a trusted third-party provider, Sumsub. Sumsub is a platform for identity verification and fraud prevention. You can learn more about how your information is processed within their Privacy Policy.