VASP registration in the UK is mandatory for crypto businesses targeting UK customers. Learn what the FCA requires, why applications get rejected, and how to navigate the complex compliance process.
Travel Rule UK: What It Means for Crypto Exchanges and Users
When you send crypto from one exchange to another in the UK, the Travel Rule, a global anti-money laundering requirement that forces financial institutions to share sender and receiver details on transactions above a certain value. Also known as FATF Rule 16, it was adopted by the UK in 2020 and now applies to all licensed crypto businesses. This isn’t about tracking your personal wallet moves—it’s about exchanges reporting transactions over £1,000 to regulators. If you’re using Binance, Coinbase, or any UK-regulated platform, your name, ID, and transaction details are being shared behind the scenes.
The Financial Action Task Force, an international body that sets global standards to fight money laundering and terrorist financing created the Travel Rule to close loopholes that criminals used to move crypto anonymously. The UK’s Financial Conduct Authority, the official regulator overseeing crypto businesses in Britain enforces it strictly. Exchanges that don’t comply face fines, license revocation, or even shutdowns—like what happened to CoinCasso and Paycml, both of which failed to meet basic compliance standards. This rule doesn’t just affect big platforms. It also impacts how smaller DeFi projects and new exchanges operate. If they can’t verify users or share data, they can’t legally serve UK customers.
For users, this means less privacy—but more safety. You’ll see extra verification steps when sending crypto to another exchange. That’s not a glitch. It’s the system working. The rule helps prevent fraud, ransomware payments, and darknet market activity. But it also makes it harder for scammers to hide. That’s why you’ll find so many posts here about fake airdrops, scam exchanges, and unregulated platforms. They all try to bypass the Travel Rule. The ones that succeed are the ones you should avoid.
What you’ll find in this collection isn’t theory. It’s real cases. CoinFalcon got flagged for poor compliance. OPNX collapsed because it couldn’t prove where its funds came from. Even the so-called "privacy coins" struggle here—because if they’re traded on UK platforms, the rule still applies. This isn’t about stopping innovation. It’s about making sure innovation doesn’t become a tool for crime. The Travel Rule UK is the line between a trustworthy crypto market and a wild west. And right now, the UK is enforcing it harder than most countries.