Both CARF and the Travel Rule address crypto-asset transfers, but with different objectives. Understanding their relationship helps coordinate compliance.
Travel Rule Overview
FATF Travel Rule requires:
- Sharing originator/beneficiary information
- For transfers above thresholds
- Between VASPs (Virtual Asset Service Providers)
Information Overlap
Both require:
- Originator name and address
- Account/wallet identifiers
- Transaction details
Key Distinctions
Purpose
Travel Rule: AML traceability. CARF: Tax reporting.
Timing
Travel Rule: Real-time with transfer. CARF: Periodic reporting.
Recipients
Travel Rule: Receiving VASP. CARF: Tax authorities.
Complementary Requirements
Travel Rule and CARF serve different purposes - AML vs tax compliance - but share common data elements that can be collected together.
Compliance Coordination
- Shared data collection
- Integrated transaction monitoring
- Common technology infrastructure
Future Evolution
Both frameworks continue to evolve. Monitor for:
- Threshold changes
- Data element additions
- Technology requirements
Conclusion
Travel Rule and CARF compliance can be coordinated for efficiency while respecting their distinct objectives.
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