Recommendation 16

Definition ∞ Recommendation 16 refers to a specific guideline issued by the Financial Action Task Force, known as the “Travel Rule.” This recommendation requires virtual asset service providers to obtain and transmit originator and beneficiary information for virtual asset transfers above a certain threshold. It aims to prevent money laundering and terrorist financing in the digital asset space, aligning with traditional financial regulations.
Context ∞ News frequently reports on Recommendation 16 as a significant regulatory challenge for the cryptocurrency industry, often leading to calls for standardized compliance solutions. Its implementation requires virtual asset service providers to develop new technical protocols for information sharing, impacting operational costs and cross-border transaction flows. Adherence to this rule is a major focus for global regulatory efforts to combat financial crime.