Bradley attorney Carl Van Cleef was quoted in an article on moneylaundering.com about the effect of the travel rule on the cryptocurrency industry. Under the rule, the U.S. Treasury Department requires banks, money services businesses and others to share the names, addresses and account numbers of both the originators and beneficiaries of payments of $3,000 or more with the next financial institution in line to handle the funds. Some cryptocurrency firms thought the travel rule didn’t apply to their industry until Ken Blanco, director of the Treasury Department’s Financial Crimes Enforcement Network, recently announced that the $3,000 threshold applies unequivocally to the cryptocurrency industry.
Blanco’s speech and FATF’s guidance have set off “a flurry of activity” inside exchanges and other cryptocurrency firms and spurred them to develop software or other solutions to meet the rule’s requirements, said Van Cleef.
Some exchanges have sought to comply by restricting outbound transfers that trigger the travel rule to wallets that are already owned by the customer, rather than by anyone else, so that the exchange or wallet provider can rely on information they have already collected, Van Cleef said.
“There is a lot of activity that is $3,000 or more,” said Van Cleef. “The major problem is, given the nature of cryptocurrency, can you collect the information you need to comply with the rule?”
The full article, “FinCEN Travel Rule Tests Cryptocurrency Industry,” first appeared on moneylaundering.com on January 24, 2020.