FATF Recommendation 16

Definition ∞ FATF Recommendation 16 is a guideline issued by the Financial Action Task Force requiring financial institutions and Virtual Asset Service Providers (VASPs) to obtain and transmit originator and beneficiary information for cryptocurrency transfers. This directive aims to prevent money laundering and terrorist financing activities. It is commonly known as the “Travel Rule.”
Context ∞ Compliance with FATF Recommendation 16 represents a substantial regulatory challenge for the digital asset industry globally. Jurisdictions are in various stages of implementing this recommendation, leading to ongoing discussions about standardized technical solutions and interoperability protocols to facilitate secure and compliant information sharing among VASPs.