[Gate.io: For Beginners] What are Travel Rules? Financial Services Agency

About Gateio

In February 2023, Japan’s Financial Services Agency announced its policy on travel rules. What exactly are travel rules? And I have put together an article about what kind of impact it will have, so I hope you can refer to it.

What are Travel Rules?

The travel rule is a rule that when a customer of an exchange remits virtual currency, the source exchange notifies the information to the destination exchange. Information includes sender information, recipient information, recipient side cryptocurrency exchange, and information related to transaction purpose, etc. An organization called FATF proposed this rule, and the Japanese Financial Services Agency will implement it accordingly.

FATF is an international organization that promotes the regulation of international standards. It consists of a total of 39 countries and regions, including the United States and Europe. The FATF reviews each country’s regulations and determines whether they comply with the standards.

Purpose of the Travel Rule

The purpose of the Travel Rule is to prevent fraudulent transfers, hacking and money laundering. The purpose is to enable tracking in case of unauthorized use, so it is very useful for crime prevention. In order to prevent crypto assets from being misused for crimes, etc., information is provided so that remittances that are considered to be fraudulent can be traced.

User impact

Travel rules are a system for crime prevention. However, this has not only advantages for users, but also disadvantages, so it has an aspect that cannot be said to be unconditionally good.

Exchanges that cannot send money

Enforcing the Travel Rules requires providing information. However, some exchanges cannot do that, so remittance is NG. Since the countries to be notified and the exchanges that can be notified are limited, there will be exchanges that cannot be used, so it can be a risk for users.

time consuming

When depositing cryptocurrencies on an exchange, there are no more restrictions than withdrawing. However, depending on the system of the remittance source and the content of the notification, the cooperation may not go well, and it will take time to reflect. Users will be stressed that they will not be reflected even if they deposit or withdraw.

Transfer funds to Metamask

No impact at this time. However, even if it is a personal wallet, it is mandatory to provide delivery information. Therefore, if you make a false report, you may receive penalties such as suspension of trading, so it can be said to be dangerous.

Possibility of tighter regulation

The travel rule is not yet a very strict regulation as of 2023, but it is possible that the regulation will become even stricter in the future and the use of exchanges will become stricter. Therefore, users will be required to acquire news etc. in the future.

Account opening is free

Opening an account with Gate.io is free. Gate.io will be the exchange that handles the largest number of virtual currencies in the world, so it is highly recommended.