Crypto Regulation Shifts Focus to Identity Checks and Compliance

The way users transfer digital assets is changing due to increasing regulations in the crypto space. The Financial Action Task Force (FATF) has seen a significant expansion of its Travel Rule, which requires regulated crypto service providers to collect and share information about the sender and recipient of certain digital-asset transfers.

In June 2025, FATF reported that 99 jurisdictions had passed or were in the process of passing legislation implementing the Travel Rule. This rule aims to improve transparency around cross-border digital-asset transfers and combat money laundering and terrorist financing.

The European Union's Transfer of Funds Regulation has also been implemented, requiring originator and beneficiary information to accompany many crypto transfers involving regulated service providers. MiCA introduces operational and compliance requirements for firms offering crypto-transfer services, including agreements outlining responsibilities, security systems, fees, and applicable law.