Travel Rules and Non-Custodial Wallets
How MEY GS Helps Comply with Travel Rule Requirements for Non-Custodial Wallets
Why the Travel Rule Is Important for Non-Custodial Wallets
The Travel Rule, introduced by FATF and enshrined in Regulation (EU) 2023/1113, requires virtual asset service providers (VASPs) to identify users and confirm wallet ownership during crypto asset transfers. This rule also applies to non-custodial wallets, which are managed directly by users. Article 14 of the Regulation mandates providers to confirm that a specified wallet address belongs to a particular user, while Article 4 requires that all crypto asset transfers include comprehensive information about the sender and receiver. These measures are critical for preventing anonymous transactions, combating money laundering and terrorism financing, and ensuring compliance with regulatory standards. The EBA guidelines on the Travel Rule further clarify providers’ obligations and the necessary procedures to meet these requirements.
How MEY GS Addresses This Challenge
MEY GS offers two approaches, fully aligned with the Travel Rule, to confirm ownership of non-custodial wallets. The first method involves signing a unique system-generated message, demonstrating the user’s access to the private key associated with the wallet. This ensures data security, as the private key remains under the user’s control. The second method involves sending a verification transaction to validate that the specified wallet is under the user’s control. Both approaches comply with Regulation (EU) 2023/1113, ensuring transaction transparency and preventing anonymity.
Verification Process
The user begins by creating an account, providing their information, and confirming it via two-factor authentication. Next, they complete identity verification by uploading documents, which are automatically or manually reviewed in complex cases. After identity verification, the user chooses a wallet verification method: signing a message or performing a test transaction. Once successfully verified, MEY GS updates the wallet’s status to “verified” and provides a wallet ownership certificate with a QR code for authenticity checks.
Why This Solution Aligns with the Travel Rule
MEY GS meets Travel Rule requirements by ensuring that all transaction-related information, including sender and receiver details, is properly documented. The solution employs advanced encryption methods to protect data, supports integration with various blockchains like Ethereum and Tron, and is compatible with hundreds of wallets, offering flexibility and convenience to users. These methods fully comply with Regulation (EU) 2023/1113 and GDPR requirements, guaranteeing both legal compliance and user privacy. By ensuring transaction transparency and preventing illicit activities, MEY GS serves as a vital tool for companies aiming to comply with the Travel Rule.