Travel Rule

The Travel Rule originates from FATF Recommendation 16, which required financial institutions to include originator and beneficiary information in wire transfers. The FATF extended this obligation to virtual asset service providers in 2019. In the EU, the Travel Rule is implemented through the Transfer of Funds Regulation (TFR) — Regulation (EU) 2023/1113.

Under the EU TFR, CASPs must collect and transmit originator name, account identifier, and date of birth or address for transfers between CASPs. For transfers to or from unhosted wallets above €1,000, the obligations are more complex — requiring proof of ownership or control of the address.

Unlike MiCAR, the TFR is supervised by national competent authorities under EBA coordination, not ESMA. The EBA published Guidelines on Travel Rule implementation in July 2024 (EBA/GL/2024/09), setting out supervisory expectations for CASP-to-CASP information transmission, unhosted wallet due diligence, and breach notification. This means breach notifications, supervisory contacts, and enforcement actions under TFR are separate from MiCAR obligations — a distinction that compliance teams often overlook.