New Travel Rule Directive Aims to Boost Transparency in Crypto Transactions
The Financial Intelligence Centre (FIC) issued Directive 9, requiring compliance with the ‘travel rule’ for crypto asset transactions. Directive 9 comes into effect on 30 April 2025 provides for stringent transparency standards accountable institutions engaged in crypto asset transfers to prevent money laundering, terrorist financing, and proliferation financing.
What Is the Travel Rule?
The travel rule is all about transparency. It ensures that essential information about the originator and beneficiary of crypto asset transactions is transmitted alongside each transfer. This rule applies to all Crypto Asset Service Providers (CASPs) involved in transactions and aligns crypto regulations with international anti-money laundering standards.
Who Must Comply?
All CASPs who are registered as accountable institutions with the FIC must comply, including institutions based in South Africa providing crypto transfer services for both domestic and international clients.
Key Compliance Obligations
The CASPs originating the transaction must securely transmit originator and beneficiary details to the receiving institution. This should be done immediately, before or alongside the crypto transfer.
CASPs must maintain detailed records of transaction-related information for access by regulatory authorities.
CASPs must also comply with other legal requirements, such as those under the Currency and Exchanges Act for cross-border transactions.
Failure to meet the requirements of Directive 9 can result in administrative sanctions under section 45C of the FIC Act, including significant financial penalties.
What Accountants Need to Know
Accountants working with CASPs or clients with crypto assets must be aware of this Directive and:
Educate clients about their obligations under Directive 9.
Ensure crypto transactions include all required information and are aligned with international standards.
Keep informed about regulatory developments to provide accurate guidance.
Directive 9 is a critical step in fortifying crypto asset governance. Accountants play a key role in guiding businesses toward compliance, ensuring integrity, and reducing risks associated with non-compliance.
Read more in the Media Release of the FIC.
