What is the Travel Rule?
The ‘Travel Rule’ was first introduced by the Financial Crimes Enforcement Network (FinCEN) under the US’s Bank Secrecy Act (BSA) and came into effect in the US on May 28, 1996. The travel rule ensures that crypto businesses such as us, Tokenize Malaysia, follow the regulations and adhere to sanctions.
Who is the Financial Action Task Force (FATF), and why is it needed?
The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies on Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) to protect financial systems and the economy from threats of money laundering and terrorism financing. In 2019, FATF extended the Travel Rule to Virtual Asset Service Providers (VASPs), including crypto companies.
VASP? What is that?
The Virtual Asset Service Provider (VASP) facilitates the buying, selling, depositing or transferring of digital assets on behalf of customers. Tokenize Malaysia is an example of a VASP.
How does the Travel Rule affect you?
As a result, you will need to provide the recipient’s details when sending digital assets on Tokenize Malaysia. We will use this information to contact the recipient securely, as required by the Travel Rule. During the transfer, we will share payment instructions with the other VASP, including the recipient’s details and your name, address, and identity number. Please note that the sharing of information is covered by our privacy policy.
What do I need to do?
Confirmation during Withdrawal:
During the withdrawal of digital assets, Tokenize Malaysia will ask you to confirm the following:
- Whether the recipient’s address belongs to you or someone else
- The name of the VASP, in case the address is held with another exchange or crypto platform
- The name of the wallet provider, in case the address is a private wallet address
Providing Accurate Information:
To ensure a smooth transaction, you must obtain accurate information directly from the recipient, such as:
- The full name of an individual recipient
- The full registered name for a company or legal entity
- Date of birth and country of residence or incorporation in some cases
What are the differences between VASP and Private Wallet Address?
VASP Address:
A VASP address is held by another exchange or crypto platform under your name (or the recipient’s name). The platform holds the private key on your behalf. This allows for easier trading and management of digital assets through the platform.
Private Wallet Address:
A private address is a wallet that you create yourself to hold your private key. Examples of these include hardware wallets such as the Ledger Nano X. This type of wallet gives you complete control over your digital assets and is often considered to be more secure than using a VASP.
As a recognized market operator regulated by the Securities Commission (SC) Malaysia, Tokenize Malaysia is committed to maintaining the highest standards of compliance for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT). This includes implementing the Travel Rule as required by the authority to provide a secure trading experience for our customers.
While regulatory matters can be overwhelming, they are in place to provide a safe place for you to buy, sell, deposit, and withdraw your digital assets. At Tokenize Malaysia, we empathize with the challenges of compliance and are dedicated to keeping our customers informed about any enforcement of the Travel Rule on our exchange. You can reach out to our Customer Support for further inquiries.