The FATF’s Travel Rule was implemented to curb the likelihood of cryptocurrencies being used to launder money. It requires Virtual Asset Service Providers to gather information about their users, then shares the info with other providers when assets are being transferred between entities.
By gathering sender information like a physical address and a national identification number, crypto exchanges can effectively control accountability for transactions in their systems. Not only do these transactions come with a cryptographic hash that can be tracked over the assets’ journey, but now exchanges will know who is sending it, down to their social security number.
