Glossary
The Travel Rule (FATF Recommendation 16)
The FATF requirement that originator and beneficiary information travel with virtual-asset transfers.
Definition
The Travel Rule, FATF Recommendation 16, requires financial institutions and virtual asset service providers (VASPs) to exchange originator and beneficiary information for transfers above a threshold, so that both sides of a transaction are identifiable.
Regulatory context
For fiat, the threshold is typically any cross-border wire. For virtual assets, FATF set a USD 1,000 threshold below which simplified measures apply. Jurisdictions implement the rule differently (e.g., FinCEN's rule in the US). The rule complements but is distinct from OFAC sanctions screening.
Who it affects
VASPs, crypto exchanges, custodial wallets, and payment platforms handling qualifying transfers. Non-custodial agents moving funds between their own wallets are generally outside Travel Rule scope but still inside OFAC scope.
Relevance to AI agents
Travel Rule is an AML transparency obligation; OFAC sanctions screening is a separate, parallel obligation. An agent must do both: collect and transmit Travel Rule data where applicable, and screen the counterparty against sanctions before payment.
SanctionsAI coverage
SanctionsAI handles the sanctions-screening half. Travel Rule message formatting and counterparty VASP identification is a separate system.
FAQ
1. Is the Travel Rule the same as sanctions screening?
No. The Travel Rule requires identifying both sides of a transfer; sanctions screening checks them against sanctions lists. They are separate obligations that apply in parallel.
2. What is the Travel Rule threshold for crypto?
FATF's simplified-due-diligence threshold for virtual asset transfers is USD 1,000. Above it, full originator and beneficiary information must travel with the transfer.
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