1. What is the travel rule?
The Travel Rule requires financial institutions to share certain basic information about their customers when transactions over a certain amount to another financial institution take place. The Monetary Authority of Singapore (MAS) has recently incorporated the Financial Action Task Force Value Transfer Requirements (‘Travel Rule’) under the Payment Services Act (Notice PSN02). In compliance with the new requirements, Cake DeFi will be implementing new measures on funds withdrawals from 31 March 2022 onwards. The Travel Rule is also known as the FATF Recommendation #16 on combating against money laundering and the financing of terrorism and proliferation.
2. How does travel rule impact the withdrawal processes?
The overall withdrawal process will not change. You have to whitelist your addresses once and can then use our services in the usual way. Adhering to the Travel Rule gives our customers peace of mind that Cake DeFi is always at the forefront of delivering safe and secure products and services with our customers in mind.
3. How do I know whether the address belongs to a private (non-custodial) wallet or a platform (custodial)?
The major difference between a private (non-custodial) wallet and an address belonging to a platform (custodial) is the ownership of the private keys.
Your deposit address with Cake DeFi is an example of an address belonging to a platform (custodial). Also, deposit addresses on most centralized exchanges (for example Binance, Kraken or Coinbase) belong to a platform (custodial). When an address belongs to a platform, the platform/service owns the private keys and holds your assets in custody.
The DeFiChain Wallet, Metamask or TrustWallet are examples of a private (non-custodial) wallet. With a private wallet, the user alone owns the private keys and has full control over the wallet.
4. How do I whitelist an address?
The whitelisting process is fairly straightforward.
If you are using a new address, then you have to enter the following details during the whitelisting process:
- Whether the address is a custodial (belongs to a platform) or a non-custodial address (belongs to a private wallet)
- Platform name in case of custodial address. If the platform name is not in the list, the user can choose “Other” and indicate the platform name in a text box.
If you already have a legacy address whitelisted and saved to your Cake DeFi profile:
All you have to do is to update this address during the withdrawal process. Simply click the “Edit” button and update the address with the following information:
- Whether the address is a custodial (belongs to a platform) or a non-custodial address (belongs to a private wallet)
- Platform name in case of custodial address. If the platform name is not in the list, the user can choose “Other” and indicate the platform name in a text box.
5. Will there be a limit on the amount that I can send to wallets now?
There are no changes regarding the withdrawal limit. As long as your withdrawal amount is higher than the withdrawal fee, you can withdraw as much as you want.
6. Why do I need to declare ownership of the address?
Cake DeFi wants to ensure that users are only transferring money to themselves. As a result, users have to now specify that they are in possession of the addresses they are using and whether these addresses are custodial or non custodial wallet addresses. Cake DeFi undertakes this step to fully abide by the rules set by the Monetary Authority of Singapore (MAS). In compliance with the new requirements, Cake DeFi will be implementing new measures on funds withdrawals from 31 March 2022 onwards.
7. What happens to the withdrawal if there is a mistake in the information that I provide?
It is important for you to make sure that the information that you provide is correct. Otherwise, there will be a risk of your withdrawal being rejected or loss of your assets in some cases.
8. What happens if I do not have the information you are seeking for the receiving wallet?
This information will be required in order to proceed with the withdrawal. If you are not sure about the information, please contact the support of the receiving platform/wallet for further information.
9. Will this only be required for when withdrawing a certain amount, if so what is that limit?
This applies to all withdrawals, regardless of the amount.
10. Does travel rule apply to all Cake DeFi users?
Yes, the Travel Rule implementation will apply to all Cake DeFi users, regardless of their residency.
11. Does this rule require any reporting to the government of any information?
No, you do not have to report anything to the government.