JMLSG consults on travel rule

JMLSG is consulting on changes to its guidance in respect of the travel rule for cryptoasset transfers. The changes will add a new Annex 1 to Chapter 22 in Part 2 and will reflect the requirements in Part 7A of the MLRs. The requirements, which relate to provision of information with transfers, relate to all payments made in cryptoassets, regardless of their value or purpose, unless the payment is already covered as a “transfer of funds” under the FTR, and will apply to all “cryptoasset businesses”, that is crypto exchange providers or custodian wallet providers. The draft guidance:

  • notes the potential difficulties caused by the “sunrise” issue, where some jurisdictions have not yet implemented the rule – and notes that UK entities should be aware of FCA communications on this;
  • summarises the information that must be provided and by whom;
  • summarises monitoring and record keeping requirements;
  • addresses what should be done if information is missing or inaccurate;
  • clarifies the role of intermediaries;
  • clarifies that returning cryptoassets to their owners is not a transfer for these purposes but notes the challenges of making a return;
  • sets out a risk-based approach to unhosted wallet transfers and attributing wallets; and
  • answers some FAQs.

Consultation closes on 25 August.

Emma Radmore