The Crypto Travel Rule is a regulatory guideline aimed at increasing transparency and compliance in cryptocurrency transactions. This rule is particularly relevant for virtual asset service providers (VASPs), which include cryptocurrency exchanges and digital wallets.

The rule was developed to combat illicit activities, such as money laundering and terrorist financing, in the cryptocurrency space. The idea is to ensure that adequate information about the parties involved in a cryptocurrency transaction is shared between VASPs, similar to the disclosure obligations that exist in the traditional financial system.

The term "Travel Rule" is derived from the analogy that information about a transaction must "travel" along with the transaction as it moves between different cryptocurrency entities and platforms. This information usually includes identifying data such as the name and address of the users involved in the transaction.

The implementation of the Crypto Travel Rule is an effort to integrate cryptocurrencies into existing regulatory frameworks and address concerns related to compliance and security in the cryptocurrency ecosystem. It is important to note that the exact implementation may vary from jurisdiction to jurisdiction, as different countries may take slightly different approaches to this rule.