CryptoUK, a self-regulatory trade association for the United Kingdom’s crypto industry, released an in-depth guide to navigating the “complications” in complying with the U.K.’s crypto Travel Rule, which aims to bring more transparency to crypto transfers.
The CryptoUK Travel Rule Working Group published a 36-page guide to help crypto businesses navigate the U.K.’s Travel Rule.
Led by Elliptic’s senior policy adviser, Mark Aruliah, and Notabene’s regulatory and compliance senior associate, Catarina Veloso, the group worked with key stakeholders to provide industry perspectives on compliance challenges.
Key crypto compliance considerations for VASPs
On Sept. 1, 2023, the U.K. implemented the Travel Rule for crypto businesses within its jurisdiction. The rule requires virtual asset service providers (VASPs) to collect, verify and share information related to crypto transfers. Under the rule, VASPs must conduct risk-based assessments before making cryptocurrency available to the recipient.
A spokesperson from CryptoUK told Cointelegraph that the guide aims to help VASPs, crypto businesses, and other market participants gain a deeper understanding of the rule’s application in the United Kingdom.
The trade association said that while they worked with regulators to get more clarity for businesses, businesses still face challenges in navigating the rules. CryptoUK said:
“[...] there are still complications for organizations in the multi-jurisdictional approach of the Travel Rule and as such, we produced this guide to help share some best practices with organizations in terms of how to navigate the U.K. environment.”
Because of this, the organization compiled insights into the current compliance approaches of companies that are members of its Travel Rule Working Group.
Main areas for compliance
When asked about the key things businesses should consider when complying with the Travel Rule, the spokesperson said that the rule applies to companies registered with the Financial Conduct Authority (FCA) and conduct unhosted wallet transfers and inter-crypto asset business — one U.K.-based crypto firm to another.
U.K.-based cryptocurrency businesses must collect, verify and share information about the source of funds and the beneficiary when transferring digital assets to another cryptocurrency business.
The spokesperson added that the characteristics of the transfer will dictate the level of information that businesses involved in the transfer should collect, verify and transmit.
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U.K. “making progress” with regulatory clarity
Meanwhile, CryptoUK believes that the U.K. has advanced its approach to crypto regulation. “The U.K. has been making progress in its approach to regulatory clarity with many inroads being made in the past few years,” the spokesperson said.
While the upcoming elections may put a temporary pause on progress, CryptoUK hopes to drive conversations with the new government to make sure that the U.K. “does not fall any further behind” in terms of crypto regulation.
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