The Financial Conduct Authority (FCA) of the U.K. has released guidance stating that new crypto money laundering rules need not completely stop transfers to countries that don’t follow international norms. The controversial travel rule, which requires crypto operators to identify the sender and recipient of funds transfers, is set to take effect in the U.K. as of September 1.
When receiving funds from countries that don’t yet comply with the travel rule and with incomplete data, crypto firms should be “making a risk-based assessment of whether to make the cryptoassets available to the beneficiary,” said the FCA’s guidance.
Crypto firms should still collect customer data even if the transfer destination can’t receive it, and should fully comply with the new legislation when making transfers within the U.K. or other compliant jurisdictions. The travel rule was agreed by the Financial Action Task Force (FATF) in an effort to stop crypto being used to disguise criminal funds, and has already been legislated in the European Union.