What is the travel rule?

The travel rule is a regulation introduced under the revised European Transfers of Funds Regulation (TFR), requiring certain information to 'travel' with a transaction. This means that details of both the sender (the person initiating the transaction) and the recipient (the person receiving the transaction) must be shared.

In the traditional financial sector, this rule (aimed at preventing money laundering and other illegal activities) has been in place for a long time, but it now also applies to the bitcoin and wider crypto sector.

At Bitonic, you are only allowed to perform transactions to and from yourself, either using a personal wallet (self-custodial) or a hosted wallet (custodial) provided by an exchange. Transactions to third parties are not allowed.

What does this mean for you?

1. Residential address verification for bitcoin withdrawals

If you want to withdraw bitcoin to a personal wallet (self-custodial) or a hosted wallet (custodial) hosted by an exchange, we are required to verify your residential address. You can verify your residential address in one of the following ways:

1. Using iDIN: Easily and quickly verify your residential address through your banking app.
2. Upload a document: Upload a document clearly showing your residential address.
3. Take a photo: Take a photo of a document with your residential address clearly visible.

2. Wallet verification for personal wallets (self-custodial)

If you want to withdraw bitcoin to a personal wallet and the value exceeds € 1,000, you must verify your bitcoin address to confirm ownership. This can be done in two ways:

1. Upload a screenshot or photo: Provide a screenshot or photo of your wallet displaying your bitcoin address clearly. More information about screenshots and photos.
2. Sign a message: Verify your wallet by cryptographically signing a message (message signing). More information about message signing.

Tip: Verify your bitcoin address in advance to ensure faster processing of your transactions.

3. Information sharing for hosted wallets (custodial)

If you send bitcoin from a hosted wallet (for example, an exchange) to your Bitonic account, the exchange must send your details along with the transaction. Similarly, when you send bitcoin from your Bitonic account to a hosted wallet, we will share your verified information.

• Information is always shared if the destination is a hosted wallet, the €1,000 threshold does not apply in this case.
• If information is missing, the transaction may be temporarily suspended until the required details are provided.

Note: Bitonic does not support all exchanges due to our strict privacy and security standards. For transactions, we provide a list of supported exchanges. If an exchange is not supported, we recommend using your personal wallet as an intermediary. First send bitcoin to your personal wallet, and then transfer it to the exchange.

4. Specific changes for Bitonic Savings

• Are you using a personal wallet for your savings plan? Then you need to verify your bitcoin address before your bitcoin can be sent.
• Are you using a bitcoin address from a hosted wallet at an exchange in your current savings plan? This address will be deactivated and the savings plan will from that moment use your Bitonic account as the destination for your bitcoin.
• For new savings plans, bitcoin can only be sent to personal wallets or to your Bitonic account and no longer to hosted wallets at an exchange.

What information is shared and how is it secured?

The information shared includes your full name, bitcoin address, residential address, document number, customer number, and possibly your date and place of birth. This information is sent with the transaction to the receiving exchange, which typically already has this information and will check it.

We understand that this is sensitive information. At Bitonic, your privacy is our priority. We use secure, self-hosted, open-source protocols to encrypt this information during transmission. Our systems are designed for maximum security and do not rely on centralised intermediaries, minimising the risk of data breaches and ensuring optimal protection of your data.

Unfortunately, this also means that we do not collaborate with all exchanges, as some fail to meet our high privacy and security standards. If you cannot use an exchange directly, we recommend using your personal wallet as an intermediary:

1. Send bitcoin from your Bitonic account to your personal wallet.
2. Transfer bitcoin from your personal wallet to the exchange.

Note: Do not send bitcoin to an exchange while claiming it is a personal wallet. This could result in the loss of bitcoin. Always use your personal wallet as an intermediary.

When do these rules apply?

These rules will take effect on December 30th 2024. As there remains considerable uncertainty within the industry, changes may occur in the future. We will keep you updated accordingly.

Got questions? Feel free to contact our customer support. Want to learn more about the travel rule? Visit bitcoin.nl (Dutch), read the EBA news article, or review the official text of the TFR.