Travel Rule guidance note

Summary

This guidance note from the JFSC sets out the Commission's expectations for how Virtual Asset Service Providers (VASPs) in Jersey should comply with the Travel Rule, which requires accurate originator and beneficiary information to accompany virtual asset transfers. It supplements, but does not replace, Jersey's existing AML/CFT/CPF regime, including the amended Wire Transfer Regulations that brought VASPs into scope from 1 September 2023.

• VASP to VASP transfers: VASPs must demonstrate full compliance with the Travel Rule, maintain a functioning solution and documented procedures, and ensure accurate transmission and retention of required originator and beneficiary information.
• Dealing with non-Travel Rule jurisdictions: When sending funds to a jurisdiction without the Travel Rule, VASPs must take reasonable steps to check if the recipient can receive the information and must collect and retain transaction information regardless; when receiving from such jurisdictions, they must apply a risk-based assessment, potentially using blockchain analytics, before releasing funds, and remain fully responsible for AML/CFT/CPF obligations including SAR filing.
• Required transfer information: Originator VASPs must ensure transfers are accompanied by names, entity registration details, account numbers or unique transaction identifiers, transaction hash numbers, and additional identifying information for individual or legal entity originators, provided before or at the moment the transaction completes.
• Transaction value thresholds: For transfers below EUR 1,000, verification of payer information is not required absent suspicion of money laundering or terrorist financing; aggregated or linked transactions from the same originator to the same beneficiary should be monitored and controlled.
• In-scope and out-of-scope transfers: Intragroup transfers and transfers between VASPs where originator and beneficiary are the same person are in scope; transfers within the same VASP or between VASPs acting on their own behalf, and transfers under EUR 1,000 (absent suspicion), are out of scope.
• Intermediary VASPs: Intermediary VASPs (including custodians and OTC desks) must check that all required information has been received before completing a transfer, consider delaying or refusing transfers where information is missing, document their reasoning, and forward late-received information as soon as practicable; each VASP must determine for itself whether it is acting as an intermediary.
• Transfers to or from unhosted wallets: Jersey VASPs should apply a risk-based approach to unhosted wallet transfers, considering the business relationship, jurisdiction, transaction value/frequency, and blockchain analytics outputs, and should not release virtual assets to a beneficiary where ownership and control of an unhosted wallet cannot be sufficiently verified.

An appendix provides worked scenarios clarifying when the Travel Rule applies in custodian-exchange relationships, distinguishing in-scope VASP-to-VASP transfers from out-of-scope transfers involving unhosted wallets or same-entity transfers.

Key obligations

• VASPs must have a functioning Travel Rule solution in place and be able to demonstrate it working effectively, supported by documented procedures.
• Originator VASPs must ensure required originator and beneficiary information (names, account numbers/identifiers, transaction hash, and additional individual or entity identifiers) accompanies transfers before or at the moment the transaction completes.
• When sending virtual asset transfers to jurisdictions without the Travel Rule, VASPs must take reasonable steps to establish whether the recipient VASP can receive required information and must collect and retain transaction information regardless.
• When receiving transfers from jurisdictions without the Travel Rule, VASPs must apply a risk-based assessment (potentially using blockchain analytics) before making funds available to the beneficiary, and remain responsible for filing SARs where relevant.
• VASPs must have controls, policies and procedures to detect potentially linked or aggregated transactions between the same originator and beneficiary.
• Intermediary VASPs must verify all required information has been received before completing a transfer, consider delaying or refusing incomplete transfers on a documented risk-based approach, and forward any late-received information as soon as practicable.
• VASPs must adopt a risk-based approach for transfers to or from unhosted wallets and must not release virtual assets to a beneficiary where ownership and control of an unhosted wallet cannot be sufficiently verified.

Applies to

Virtual Asset Service Providers (VASPs)