When you send crypto from one exchange to another, a hidden rule called the Travel Rule crypto, a global anti-money laundering requirement that forces crypto exchanges to share sender and receiver info on transfers above a certain amount. Also known as FATF Rule 16, it was created to stop criminals from hiding money in anonymous digital wallets. Think of it like filling out a bank wire form—but for Bitcoin, Ethereum, or any other token. If you send $1,000 or more, the exchange you’re using must collect and pass along your name, address, and wallet address to the receiving platform. Sounds simple? It’s not. And it’s already breaking how people use crypto.
This rule doesn’t just apply to big exchanges. It affects anyone using a regulated service—whether you’re trading on Binance, Coinbase, or a small DeFi gateway. Countries like the U.S., EU, UK, Japan, and South Korea have fully enforced it. But here’s the catch: if you’re sending crypto to an unregulated wallet or a peer-to-peer platform, the rule doesn’t apply… but the transaction might get blocked anyway. That’s because exchanges now filter outbound transfers based on whether the recipient can comply. If they can’t, your transaction gets stuck. This is why you’ve seen transfers fail with messages like "Recipient not compliant"—it’s not a glitch, it’s policy.
The FATF crypto regulations, a set of global standards issued by the Financial Action Task Force to combat money laundering and terrorist financing in digital assets. Also known as FATF Guidelines, it forces exchanges to become digital gatekeepers. That means more KYC, more delays, and fewer anonymous transactions. But it also means less risk of scams and frozen funds—something we’ve seen in places like the Philippines and Vietnam, where unregulated platforms led to massive losses. The crypto travel rule, the specific implementation of FATF’s requirement that obligates VASPs to transmit originator and beneficiary information on crypto transfers. Also known as crypto transfer rule, it isn’t perfect. It doesn’t fix everything. But it’s forcing the industry to grow up.
Some people say the Travel Rule kills privacy. Others say it’s the only way to make crypto safe for mainstream use. The truth? It’s both. If you’re using crypto to avoid banks, this rule feels like a betrayal. If you’re trying to protect your savings from fraudsters, it’s a shield. And right now, the biggest winners aren’t the exchanges—they’re the users who understand how it works. Those who know why their transfer failed. Those who avoid sketchy platforms that ignore compliance. Those who know the difference between a wallet that follows the rules and one that doesn’t.
Below, you’ll find real-world examples of how the Travel Rule crypto policy is playing out—from fines in Vietnam to frozen assets in the Philippines, and the hidden restrictions on platforms like dYdX. You’ll see who’s getting caught, who’s adapting, and what you need to do to stay clear of trouble. This isn’t theory. It’s happening now. And if you’re using crypto, you’re already part of it.
EU crypto businesses must comply with strict AML rules under MiCA and AMLA. Learn the key requirements: Travel Rule, KYC tiers, licensing, compliance costs, and what's changing in 2027.