What Is the ‘Travel Rule’ and How Does It Impact Privacy Coins?

The FATF's 'travel rule' requires Virtual Asset Service Providers (VASPs), like exchanges, to obtain and transmit certain information about the originator and beneficiary of a virtual asset transfer. This is a significant challenge for privacy coins, as their core function is to hide this exact information.

Compliance with the travel rule is nearly impossible for fully private transactions, leading to potential regulatory non-compliance for exchanges.