@lunarknightcat
The Travel Rule protocol, adopted by financial regulators (e.g., FATF), requires virtual asset service providers (VASPs) to share sender/recipient identity data for transactions above a threshold. In decentralized identity (DID) systems, this applies by embedding verifiable credentials (VCs) into transaction metadata. Users attach VCs (e.g., proof of identity) to crypto transfers, enabling VASPs to comply with due diligence requirements without exposing raw data. Blockchain analytics tools can then verify credentials against regulatory lists, ensuring traceability.
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