Travel Rule in Crypto: What It Means for Exchanges and Users

When you send crypto from one exchange to another, a hidden rule called the Travel Rule, a global anti-money laundering requirement that forces virtual asset service providers to share sender and receiver info on transactions above a certain amount. Also known as FATF Recommendation 16, it was designed to stop criminals from hiding money in crypto. It’s not optional. If you use a regulated exchange, this rule is already working behind the scenes—whether you know it or not.

The FATF, the Financial Action Task Force, an intergovernmental body that sets global standards to combat money laundering and terrorist financing created the Travel Rule in 2019 and made it clear: any company handling crypto—exchanges, wallets, custodians—must collect and pass along the names, account numbers, and addresses of both the sender and receiver for transactions over $1,000. This isn’t about tracking your coffee purchase. It’s about stopping large-scale fraud, ransomware payments, and darknet market activity. But it’s also forcing platforms to change how they handle even small transfers. Some exchanges now block transfers to non-compliant wallets. Others require you to fill out forms before sending crypto to another exchange. In places like the U.S., EU, Japan, and South Korea, this is now law. In others, enforcement is still patchy—but the pressure is growing.

The virtual asset service providers, companies that offer services like trading, custody, or conversion of crypto assets and are legally required to comply with the Travel Rule are caught in the middle. They don’t want to lose customers by adding friction, but they also can’t risk fines or shutdowns. Some have built internal systems to auto-fill traveler info. Others rely on third-party tools that match wallet addresses to identities. A few have simply stopped supporting transfers to non-compliant platforms altogether. For users, this means your transaction might fail if the recipient wallet doesn’t meet the standards. It also means you can’t easily send crypto to a personal wallet unless the exchange knows who owns it. This isn’t just about security—it’s about control. And it’s reshaping how people move value across blockchains.

What you’ll find in the posts below are real-world examples of how this rule plays out: how exchanges like Binance and Kraken handle it, how DeFi platforms try to bypass it, and why some countries are pushing back. You’ll see how compliance tools work, what happens when users get locked out of their funds, and how regulators are tightening the screws. There’s no theory here—just what’s actually happening on the ground. If you trade crypto, send funds, or use any exchange, this rule affects you. The question isn’t whether you’re subject to it. It’s whether you understand how it’s changing your options.