Travel rule
Also called: crypto travel rule · FATF travel rule · Recommendation 16
Definition
The travel rule is an anti-money laundering requirement that makes crypto service providers share sender and recipient information when they transfer crypto for customers.
How travel rule works
The rule comes from FATF Recommendation 16, originally written for bank wire transfers and extended to virtual assets. When an exchange sends a customer's crypto to another provider, it must pass along identifying details such as the sender's name and account and the recipient's name. FATF guidance sets a threshold of USD or EUR 1,000, though countries can set lower ones.
The EU applies the travel rule from the first euro since 30 December 2024, with extra checks for transfers to self-hosted wallets above 1,000 euros. Other countries apply their own thresholds and timelines. Exchanges use messaging protocols to exchange this data with each other.
In practice, you may now see extra fields when withdrawing: the recipient's name, whether the destination is an exchange or your own wallet, and which exchange. Some transfers may be delayed or returned if the receiving provider cannot match the information. Requirements and screens differ from exchange to exchange.
Example
Suppose you live in the EU and withdraw 1,500 USDC from one exchange to an account in your own name on another exchange. The sending exchange asks you to pick the destination exchange and confirm the recipient name. Because the receiving exchange's records show the same name, the transfer passes. If you instead sent 1,500 USDC to your own self-hosted wallet, the exchange might ask you to prove you control that wallet, for example by signing a message, because the amount is above 1,000 euros.
Common mistakes
- Entering a different recipient name than the one on the receiving account, causing a delay or return.
- Choosing exchange as the destination type when sending to a self-hosted wallet, or the reverse.
- Assuming the rule only applies to large transfers when your country may apply it from the first unit.
Learn and practise
FAQ
Does the travel rule apply to transfers to my own wallet?
It depends on the jurisdiction. In the EU, transfers to self-hosted wallets above 1,000 euros can require proof that you own or control the wallet.
Why did my withdrawal ask for the recipient's name?
Your exchange is collecting travel rule data to pass to the receiving provider. Fill it in exactly as it appears on the receiving account.