Travel Rule Implementation Still Far Off Due to Tech Limitations, Australian Regulator Reports
The Australian Department of Home Affairs stated that the country lacked the technical capabilities to implement a system that complies with the travel rule proposed for cryptocurrencies. The Department concluded this in an appearance before the Senate in Australia last Friday. However, the Australian Department also stated that, if implemented, the system would be a game-changer for preventing crypto-related crimes.
Australian Department Thinks Tech to Implement a Crypto Travel Rule Is Still Not Present
Last Friday, the Australian Department of Home Affairs acknowledged that it lacked the technical capabilities to implement a travel rule system for crypto transactions. The remarks were made by Daniel Mossop, assistant secretary of Australia’s Department of Home Affairs during a session with the Australian Senate. Mossop stated:
“I think it depends on the way that [the travel rule] is implemented so a technological solution that takes a lot of the legwork out of that would be a game changer. [But] we are not at the point where, globally, there is such a technological solution.”
Bradley Brown, national manager of the Australian Transaction Reports and Analysis Centre, who also appeared in the Senate session, shared the same opinion on the issue. He stressed that to implement the travel rule in the country would need a solid technologic solution behind it.
FATF Crypto Travel Rule
The Financial Action Task Force (FATF) recommended the implementation of a travel rule on cryptocurrency transactions since June 1st, 2019. The implementation of this travel rule would mean that a global system of interchanging information would have to be integrated into wallets and virtual asset service providers like exchanges and wallet operators. However, due to the pseudonymous traits of most cryptocurrencies, this has been difficult to implement.
Most countries are still not compliant with the travel rule completely. According to a report issued by the FATF on June 25, most countries haven’t been able to implement this solution. The report states:
The majority of jurisdictions have not yet implemented the FATF’s requirements, including the “travel rule”. This disincentivizes further investment in the necessary technology solutions and compliance infrastructure… We do not yet have global safeguards to prevent the misuse of VASPs for money laundering or terrorist financing.
Some exchanges have implemented systems that claim to comply with the travel rule automatically. This is the case of Binance, which announced the implementation of Traveler on July 2, a system designed by Ciphertrace, one of the biggest crypto intelligence companies. Traveler would address Binance’s travel rule compliance, according to the software provider Ciphertrace’s claims.
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