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Scope of the Travel Rule 

The Travel Rule applies to all virtual asset transfers which “means any transaction carried out on behalf of an originator with a view to making the virtual asset available to a beneficiary”.

All “obliged entities” and VASPs are in scope. An “Obliged entity” is defined in the 2020 VASP Act as “a person or group of persons that provide a virtual asset service that is licensed or registered and is supervised for virtual asset services by a government regulatory body in another non-high-risk jurisdiction”.

A VASP is defined as “a company, or a general partnership, or a limited partnership, or a limited liability company, or a foreign company registered in the Cayman Islands” which “provides a virtual asset service as a business or in the course of business in or from within the Cayman Islands and is registered or licensed in accordance with the VASP Law or is an existing licensee that is granted a waiver under the VASP Law”.

Virtual asset services are also defined in the VASP Act with the same meaning as the FATF which is “the issuance of virtual assets or the business of providing one or more of the following services or operations for or on behalf of a natural or legal person or legal arrangement — (a) exchange between virtual assets and fiat currencies; (b) exchange between one or more other forms of convertible virtual assets; (c) transfer of virtual assets; (d) virtual asset custody service; or (e) participation in, and provision of, financial services related to a virtual asset issuance or the sale of a virtual asset”.

Supervisory body

CIMA

Threshold

0

In order to comply with the FATF’s Travel Rule and meet AML requirements the following information is to be exchanged

  • Originator’s name, 

  • Originator’s virtual asset account number, 

  • Originator’s physical address, 

  • Originator’s ID number, or customer identification number or date and place of birth,

  • Or the unique transaction reference number that permits traceability of the transaction, where an account is not used to process the transfer of virtual assets,

  • Beneficiary’s name,

  • Beneficiary’s virtual asset account number.

When a transfer is received or sent to a non-obliged entity such as an unhosted wallet, VASPs must obtain and retain the required originator/beneficiary information from their own customer.

When do you need to comply

The 1st of July 2022.

What else do you need to know

  • Information needs to be kept for a least 5 years,

  • Registration is mandatory for all VASPs,

  • Custodians and trading platforms must apply for a license.

Applicable regulation

Anti-Money Laundering (Amendment n2), Regulations 2020

VASP Law, 2020

Guidance notes (Amendments) on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Cayman Islands

Written by:
Delphine Forma
Delphine Forma
Senior Compliance Manager at BitMEX

Delphine Forma is an experienced compliance officer who worked across different industries including Bank of Tokyo, Mitsubishi UFJ, HSBC Bank, and crypto businesses (exchanges and miners). She holds a diploma from Sciences Po Lyon, and two masters specialising in European Criminal Business Law and Frauds and Money Laundering Prevention. Delphine is a board member of the OpenVASP Association.

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