Scope of the Travel Rule
As per TVTG, article 2.a, TT means "Trustworthy Technologies (TT): "Technologies that ensure the integrity of tokens, the clear assignment of tokens to TT identifiers and the availability of tokens".
All TT transfers (e.g. all virtual asset transfers) are in scope for the application of the Travel Rule.
All TT service providers, e.g. VASPs, which provide services for third parties in connection with token or virtual currencies, are subject to money laundering regulations:
Token issuers, if provided on a professional basis
Token issuers not subject to registration that issue tokens in their own name and not on a professional basis; if an investor buys tokens with a total amount exceeding CHF1000, irrespective of whether the purchase is made in one or several transactions
TT Key depositaries
TT Token depositaries
Token exchange service providers
TT agents, if they provide or distribute TT services for the aforementioned TT service providers.
To be noted, if traders in goods are paid for an amount equal to or superior to CHF 10 000 in virtual currencies, they are also subject to due diligence obligations.
Information to be exchanged
Originator's account number, where an account is used to process the transaction.
Originator's address, official personal document number, customer identification number or date and place of birth.
Beneficiary's account number.
Every VASP has an obligation to identify the Originator VASP and verify its identity. If the counterparty is located in a high-risk jurisdiction, enhanced due diligence should be done. According to the "Guideline 2021/18 Obligations when carrying out VT transfers", the review of the counterparty should be similar to correspondent banking due diligence and should always be concluded with the approval of the senior management. The review should also include the use of a blockchain investigation provider to assess its risk exposure to potential illicit activities.
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When do you need to comply?
When a domestic VASP transacts with a large foreign VASP that has not implemented the Travel Rule yet, the domestic VASP should attempt to exchange the information. If the counterparty rejects it, this should be documented.
If the counterparty is domiciled in the EU/EEA or an equivalent third country: the transfer can be concluded without exchange of information until 1 April 2022.
If the counterparty is located in any other jurisdiction, a transfer without exchange of information may be concluded until 31 December 2021, at the latest.
If the information cannot be exchanged, enhanced due diligence and appropriate risk mitigation measures must be applied.
Article 12 of the Due Diligence Act
Article 23 of the Due Diligence Ordinance
Global Terrorism index 2020 used to determine higher risk jurisdictions
Annexe 4 of the Ordinance on professional due diligence to combat money laundering, organised crime and terrorist financing (Due Diligence Ordinance; SPV) used to determine higher risk jurisdictions
Guideline 2021/18 Obligations when carrying out VT transfers