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What is the Travel Rule?
What is the Travel Rule?
Updated over 2 weeks ago

The Travel Rule is a global regulation designed to prevent money laundering and illegal activities. It has long been in place for banks and will apply to cryptocurrency transactions in Europe starting 30 December, 2024. It requires Crypto-Asset Service Providers like Coinmerce to share basic information about the sender and receiver for certain transactions. A differentiation is made between a hosted and unhosted wallet.

What is a hosted wallet?

A hosted wallet is a secure and user-friendly digital wallet for storing your cryptocurrency. This type of wallet is managed by an external party, such as a crypto-asset service provider. An example of this is the wallet you use on Coinmerce.

What is an unhosted wallet?

An unhosted wallet is a digital wallet that allows you to have full control over your cryptocurrencies. With this type of wallet, you manage the private keys yourself, making you independent of third parties. Unhosted wallets come in various forms, such as hardware wallets, software wallets, or paper wallets. Well-known examples include Exodus, MetaMask, and Ledger.

What does this mean for me?

The travel rule only applies to cryptocurrency transfers, meaning that you can still trade and make use of your Coinmerce account as usual. If you often make withdrawals or deposits then we have listed the different types of scenarios below.

1. Withdrawal to an unhosted wallet (non-custodial wallet):

If you withdraw cryptocurrency to a self-hosted wallet, Coinmerce must verify that the wallet belongs to you. This is done by:

  • Uploading a screenshot of your wallet;

  • Our compliance team processes the verification;

  • Once verified, you won’t need to verify this wallet again.

2. Withdrawal to a hosted wallet (custodial wallet):

If you withdraw cryptocurrency to a wallet on an exchange or similar service:

  • Verify the wallet by stating the platform on which the wallet is located;

  • If you transfer cryptocurrency to someone else then share additional details about the wallet’s owner (receiver);

  • If it’s your own wallet, you can simply input your details.

3. Deposit from an unhosted wallet:

Depositing cryptocurrency from your verified self-hosted wallet is seamless. If the wallet isn’t verified yet, we’ll ask for verification first before crediting your account.

4. Deposit from a hosted wallet:

If depositing from a hosted wallet, and it’s not automatically recognised:

  • You’ll need to confirm whether the wallet is hosted or unhosted.

  • Provide details about the sender of the funds.

Your Privacy Matters

Coinmerce is committed to ensuring compliance with the Travel Rule while safeguarding your data. We follow strict security protocols to protect your information throughout these processes.

More questions?

If you have any questions regarding the Travel Rule, please reach out to us through [email protected].

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