Liechtenstein VASPs Allowed to Collect Travel Rule Data from Users: 21 Travel Rule Lets You Do Just That
The Financial Market Authority (FMA) from Liechtenstein has shown it understands the challenges VASPs face during Travel Rule adoption, approaching the sunrise issue in its guidance. You can solve it with our solution made for this need: 21 Travel Rule.
Being a relevant country in the crypto industry, Liechtenstein has recently regulated the Travel Rule for virtual asset service providers (VASPs). Following Recommendation 16 by the Financial Action Task Force (FATF), companies located in Liechtenstein that transact cryptocurrency in the name of their clients now need to exchange information on the originator and beneficiary when performing a transfer of funds.
However, the Liechtenstein Travel Rule guidance by the Financial Market Authority (FMA) was developed with special attention to the challenges VASPs all over the world have been facing when complying with this new requirement. Besides granting a grace period until the 1st of April, the FMA allows VASPs to start complying through distinct methods.
How does Liechtenstein's Travel Rule regulation differ from other jurisdictions?
The Travel Rule is a global recommendation developed by the FATF aiming to reduce money laundering and financing of terrorism within crypto. It requires companies that transact virtual assets to know, store and exchange clients' personal data with the institutions to where they are sending or receiving funds.
Image: FATF Travel Rule Breakdown
It is particularly difficult to do this if your counterparty VASPs are still not subject to these requirements, hence, not sending your company the Travel Rule data it needs. This challenge is commonly known as the "sunrise issue", where regulation is built at different times depending on the country.
Aiming for regulatory clarity, the FMA allows local companies to discover the details they need through other sources, not only relying on the VASP counterparty to inform them. This shows how the FMA understands the crypto regulatory scenario and enables the VASPs of Liechtenstein to play by the rules even though other jurisdictions are still not Travel Rule ready.
Knowing which company is on the other side of the transfer is a challenge in itself, and even more so during this Travel Rule transition period. The FMA recognizes it and states that "Various methods can be used to identify the counterparty", such as using a Travel Rule protocol (like TRP or OpenVASP) or inquiring about the user. We can help you with all of those. Still, we will dive into the latter, which allows your Liechteinsteiner VASP to be compliant even when transacting with international VASPs that do not have Travel Rule obligations yet.
Why 21 Travel Rule is tailored to Liechtenstein VASPs
When transacting with companies compliant with the Travel Rule, you can rely on our multiprotocol feature, which allows your company to exchange information regardless of the protocol your counterparty uses. However, considering that regulation is still upcoming in most countries, it is clear that VASPs will need alternative methods to gather the information and avoid risky transfers.
We want to facilitate Bitcoin adoption, and we firmly believe this can only be done with an amazing user experience. This is why 21 Travel Rule enables your users to inform all data needed for your compliance team quickly with the least disturbance on their crypto journey.
The manual transaction registration allows your compliance team to request, from your client, the details of the VASP they are transacting with. You can keep an optimal user experience, while recording the information for further inspection, as required by the FMA.
How Liechtenstein VASPs are supported by 21 Travel Rule
Building a global solution is not an easy job. This is why 21 Travel Rule was developed together with VASPs worldwide. We listen to their needs and create a product that just works for them and their clients.
In Liechtenstein, Bank Frick has been our first and most prominent client. The famous bank is well known for its crypto offerings, pushing the country's ecosystem for more extensive adoption. Ready before the FMA deadline arrives, Bank Frick trusts 21 Analytics to comply with the Travel Rule, which guarantees a product tailored to their needs in the jurisdiction.
We know how difficult navigating the new regulatory landscape can be. But it becomes easier when you choose a partner that understands your specific needs and has tailored solutions for your industry. Request a demo and start being compliant today!