How The Travel Rule Impacts Crypto Transactions in South Africa
One of the most significant global regulatory developments impacting crypto users and service providers is the "Travel Rule." Recently, South Africa has started enforcing this rule, a move that aims to enhance transparency and security in the crypto industry.
For many, the term "Travel Rule" might sound new or even a bit daunting. However, understanding its purpose and how it functions is becoming increasingly important for anyone in the cryptocurrency industry. At VALR, we're committed to ensuring our platform is safe, secure, and compliant with all relevant regulations, including the new Travel Rule requirements in South Africa.
In this article, you'll learn what the Travel Rule is, why its implementation is a key step for the industry in South Africa and globally, which other regions have adopted it, and how VALR is complying to protect its users.
What Is the Travel Rule?
The Travel Rule is a global Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) requirement issued by the Financial Action Task Force (FATF), an international body that sets global standards and provides guidelines for countries and institutions, including Crypto Asset Service Providers (CASPs) like VALR.
Essentially, the Travel Rule extends existing financial regulations, similar to those for traditional bank wire transfers, to transactions involving digital assets like cryptocurrencies. It mandates that CASPs/Virtual Asset Service Providers (VASPs), custodial wallet providers, and other financial institutions dealing with digital assets - must collect, verify, and share certain information about the originators (senders) and beneficiaries (recipients) of cryptocurrency transactions.
The core aim of the Travel Rule is to increase transparency in crypto transactions. By requiring VASPs/CASPs to know who is sending and receiving crypto, it makes it more difficult for illicit actors to use digital assets for activities like money laundering, funding terrorism, or other financial crimes. This information must "travel" with the transaction from one VASP to another, ensuring a clear audit trail.
The implementation of the Travel Rule is a global effort. It affects the crypto industry by bringing it more in line with traditional financial systems, which could foster greater legitimacy and trust. For South Africa, adopting the Travel Rule is a crucial step in aligning with international AML/CTF standards, enhancing the integrity of the nation's financial system, and providing a safer environment for cryptocurrency users and businesses. While it introduces additional data collection steps for users, the overarching goal is to protect the ecosystem from misuse and ensure sustainable growth.
Why Is the Travel Rule Implemented Now in South Africa?
South Africa's move to implement the Travel Rule, with enforcement beginning on April 30, 2025, is driven by a commitment to international financial standards and a proactive approach to regulating the crypto space. On April 18, 2024, the Financial Intelligence Centre (FIC) of South Africa issued Directive 9, mandating that all regulated Crypto Asset Service Providers (CASPs) in the country adhere to these requirements.
This implementation aligns South Africa with the FATF's global recommendations, which aim to create a more transparent and secure international financial system. By adopting the Travel Rule, South Africa demonstrates its dedication to combating money laundering and terrorist financing, which is crucial for maintaining its standing in the global financial community and preventing the country from being seen as a high-risk jurisdiction.
The Global Adoption of the Travel Rule
South Africa is not alone in implementing the Travel Rule; it's part of a broader global trend as countries work to regulate the crypto industry in line with FATF guidance. Many jurisdictions have already established their own versions of the Travel Rule, each with varying enforcement dates and thresholds.
Numerous exchanges and crypto service providers worldwide, including platforms like Crypto.com and Kraken, have been working towards compliance in the jurisdictions in which they operate. VALR also ensures full adherence to the Travel Rule.
Below is a non-exhaustive list of some jurisdictions that have implemented or are in the process of implementing the Travel Rule, showcasing the global momentum:
| Jurisdiction | Status | Enforcement Date | Threshold |
|---|---|---|---|
| South Africa | In force | April 30, 2025 | R0 (effectively no threshold) |
| European Union | In force | December 30, 2024 | €0 (effectively no threshold for information sharing) |
| United States | In force | March 13, 2013 | $3,000 |
| United Kingdom | In force | September 1, 2023 | £0 (effectively no threshold for information sharing) |
| Canada | In force | June 1, 2021 | 1,000 CAD |
| Singapore | In force | January 28, 2020 | 1,500 SGD |
| South Korea | In force | March 25, 2022 | 1,000,000 KRW |
| Switzerland | In force | January 1, 2020 | 1,000 CHF |
| Japan | In force | June 1, 2023 | ¥0 (effectively no threshold) |
| Hong Kong | In force | June 1, 2023 | 8,000 HKD |
| Australia | Grace period ongoing | March 31, 2026 | 0 AUD (effectively no threshold) |
How VALR Is Complying With the Crypto Travel Rule in South Africa
At VALR, we are committed to protecting our customers and the financial system from misuse. As part of this effort, we comply with global regulations, including the Travel Rule.
We have partnered with Sumsub, a leading global verification platform, to facilitate our Travel Rule compliance. This partnership allows us to securely collect and transmit the required originator and beneficiary information for crypto transactions in line with FATF standards.
When you initiate an outgoing crypto transaction from your VALR account to a non-VALR wallet address, irrespective of the transfer amount, you will be prompted to provide specific details about the recipient. This information typically includes:
Recipient type
The recipient's full name (for individuals) or the company's registered name (for corporate recipients).
The recipient's crypto withdrawal address.
The type of crypto wallet the recipient is using (e.g., an address on another exchange or a self-hosted wallet like MetaMask or Ledger).
If it's an exchange wallet, the name of the service provider (e.g., Binance, Bybit, etc.).
At VALR we take your privacy and security seriously. To comply with the Travel Rule, we securely collect and transmit required information, such as names and wallet details using encrypted channels and industry-standard protocols.
This data is only shared with verified and compliant crypto asset service providers. We implement robust technical and organisational security measures, apply strict access controls, store data securely, and follow global standards to ensure your information is always handled responsibly. Our Privacy Policy can be found here.
For VALR users, this means that for all outgoing crypto transactions to external wallets, providing this recipient information will be necessary. To streamline this process, especially for API users or those who frequently send to the same addresses, we encourage updating your Address Book with the required recipient details.
For more detailed information on how the Travel Rule specifically impacts your VALR account and transactions, please refer to this article.
Risk Disclosure
Trading or investing in crypto assets is risky and may result in the loss of capital as the value may fluctuate. VALR (Pty) Ltd is a licensed financial services provider (FSP #53308).
Disclaimer: Views expressed in this article are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.
