What is the Travel Rule?
The Travel Rule is a measure established to combat Money Laundering and Terrorist Financing. The Financial Action Task Force (“FATF”), an independent inter-governmental body that develops, promotes Anti-Money Laundering (“AML”) and Know Your Customer (“KYC”) and requires member countries to apply the travel rule to VC Transfers in accordance with Recommendation 16.
It requires licensed or registered virtual asset service providers regulated for AML/ATF purposes to implement effective systems for monitoring and apply the “travel rule”. Businesses dealing in VCs are required to implement a comprehensive AML/ATF compliance program, register with their respective Financial Intelligence Unit (“FIU”) as a MSB), and meet regulatory obligations related to client identification, record-keeping, and transaction reporting.
Why do I have to provide additional information for some crypto deposits and withdrawals?
To provide you with a service, CoinSmart is registered as a Money Services Business (“MSB”) regulated under the Proceeds of Crime, Money Laundering, and Terrorist Financing Act (“PCMLTF”) as administered by the Financial Transactions and Reports Analysis Centre of Canada (“FINTRAC”). As of June 1st, 2021, many regulations related to Virtual Currencies (“VC”) came into effect, one of them known as the “Travel Rule”, which requires us to collect the following information on virtual currency transfers over $1,000 CAD in value for Canadian transfers:
- the name, address and the account number or other reference number (if any) of the person or entity who requested the transfer (originator information); and
- the name, address and the account number or other reference number (if any) of the beneficiary.
CoinSmart must comply with the Travel Rule requirement and take reasonable measures to ask for the information where required.
CoinSmart’s Commitment to Compliance with the Travel Rule Requirement
CoinSmart uses an industry-approved third-party solution to comply with the obligations as set out within Travel Rule. This means when you interact on the CoinSmart platform you can expect that we will ask you for information to support our Compliance obligations to the Travel Rule.
Is the Travel Rule requirement applicable only for CoinSmart Canada?
With licenses obtained to operate in the United States and Estonia (Europe), CoinSmart will comply with the Travel Rule in line with the respective countries’ regulatory requirements. The requirements have been summarized below:
| Country | Minimum Threshold |
Information required |
| United States | USD $3,000 | The originator Institution must retain the following information:
The Beneficiary Institution must also retain the following information:
|
| Estonia |
$0 |
Information on the Originator Customer:
Information on the Beneficiary Customer:
|
How does this benefit CoinSmart users?
As we continue to work with regulators to meet compliance requirements and combat illicit activities, CoinSmart can continue to be your most trusted, secure, and safe crypto platform to better serve you long term.
Does Travel Rule impact my account?
No, we continue to provide you with the same user experience as before.
Are my transactions only restricted to the Travel Rule limit?
No, it simply means that when your transaction falls within the travel rule limit we may ask you for certain information about the transaction so as to ascertain the details of the transaction for CoinSmart to meet its Travel Rule obligations.
Who uses Travel Rule?
Below are some of the common Travel Rule users:
- CoinSmart
- Coinbase
- Crypto .com
- Kraken
- Gemini
- OkCoin
- Binance US
- Coinsquare
- ShakePay
- Fidelity Crypto Assets
- BitMex
- Bittrex
- Bitgo
- Fireblocks
- Circle
- Robinhood
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