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What is the Travel Rule?

The Travel Rule is a regulatory requirement designed to enhance transparency in financial transactions by mandating the exchange of specific information about both senders and recipients. Initially applied to traditional wire transfers, this rule has been extended to the cryptocurrency sector, especially affecting Virtual Asset Service Providers (VASPs) under guidelines set by the Financial Action Task Force (FATF).

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Travel Rule in Cryptocurrency

In 2019, and updated in 2021, the FATF established standards for Virtual Asset Service Providers (VASPs) to follow similar protocols as traditional financial institutions. For crypto transactions, the suggested threshold is approximately EUR 1K.

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Authentication Scenario

SIWX (Sign In With Solana, EVM or Bitcoin) is a two-step authentication process:
  1. Connect Wallet: First, the user connects their self-custodial wallet.
  2. Sign Message: After connecting, the user signs a message with their wallet to prove ownership of the account. This signature cryptographically proves that they control the private keys.
Here’s a practical example:
  • John wants to transfer funds from his PortugalEx account to his non-custodial wallet
  • PortugalEx implements AppKit in their withdrawal page to enable wallet connections
  • When John initiates the withdrawal:
    1. He connects his self-custodial wallet through AppKit’s interface
    2. AppKit prompts him to sign a message with the connected wallet
    3. Only after successful signature verification does PortugalEx allow the transfer
  • This SIWX flow ensures John truly owns and controls the destination wallet before permitting withdrawals

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Installing and Implementing SIWX

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Prerequisites

Before implementing SIWX for Travel Rule compliance, ensure you have:

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Example Implementation

Travel Rule SIWX Example

Check out this example implementation of Travel Rule compliance using SIWX with multichain

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Installation

Install the AppKit SIWX package: 
npm install @reown/appkit-siwx

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Usage

Once you have AppKit set up in your dApp, you can easily enable SIWX by adding the default implementation with the following configuration: 
import { createAppKit } from '@reown/appkit'
import { ReownAuthentication } from '@reown/appkit-siwx'

const appkit = createAppKit({
  projectId,
  networks,
  metadata,
  siwx: new ReownAuthentication() // add this line to enable SIWX
  
})

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Conclusion

By implementing SIWX for Travel Rule compliance, you have:
  • Enhanced your platform’s security by verifying wallet ownership before transfers
  • Simplified the user experience while maintaining regulatory compliance
  • Implemented a robust solution that works across multiple blockchain networks
This implementation helps meet Travel Rule requirements while providing a seamless experience for your users. The SIWX verification acts as a critical safeguard, ensuring that only verified wallet owners can send funds. For more advanced customization options, refer to our SIWX documentation