• The UK’s Financial Conduct Authority (FCA) has issued a statement informing that UK crypto businesses must comply with the FATF Travel Rule from September 1.
• The Travel Rule requires VASPs to collect and disclose the sender and recipient details of cryptocurrency transfers, either during or before the transaction.
• Critics raise concerns about privacy invasion, as well as the undemocratic approach of the FATF towards warrantless surveillance.
Introduction
The UK’s Financial Conduct Authority (FCA) has recently issued a statement requiring all UK crypto businesses to comply with the FATF Travel Rule by September 1. This article looks into what this rule means for users, and examines some of the controversies surrounding it.
What is the FATF Travel Rule?
The Financial Action Task Force (FATF) is an intergovernmental body headquartered in Paris, France which works to combat global money laundering and terrorist financing. Its ‚Travel Rule‘ applies particularly to Virtual Asset Service Providers (VASPs), who are required to collect and disclose information about senders and recipients on cryptocurrency transfers – either during or prior to transactions taking place.
Controversies Surrounding Compliance
Critics have raised concerns over potential privacy invasions caused by such stringent controls, as well as issues with the undemocratic approach taken by the FATF towards warrantless surveillance. Peter Van Valkenburgh from Coin Center even went so far as to slam a draft guidance document from them in 2021 for these very reasons.
Slow Implementation of The Travel Rule
In June 2021, FATF reported that there had been slow implementation of its standards among different jurisdictions worldwide – creating an even more pressing need for compliance from countries like the United Kingdom before September 1st this year.
Conclusion
With tighter regulations in place, it is hoped that user protection will be increased – preventing fraud and other financial crimes – but critics remain wary of any intrusion into their privacy rights which may occur due to such stringent measures being enforced.