Everything you need to know about the new EU regulation
In recent years, the regulation of crypto assets such as Bitcoin has gained importance. One of the key EU regulatory frameworks is the Transfer of Funds Regulation (ToFR), which aims to make crypto transfers, in addition to fiat transactions, more traceable.
This blog post explores the essential aspects, covering everything you need to know about the Transfer of Funds Regulation.
What is the Transfer of Funds Regulation (ToFR)?
The ToFR, also known as the Funds Transfer Regulation or Travel Rule, is an EU regulation that has been in effect since December 30, 2024. It aims to make transfers of crypto assets, such as Bitcoin, more traceable in order to combat money laundering and terrorist financing. Crypto service providers in Europe are required to collect, transmit, and store information about senders and recipients. The ToFR strengthens the transparency of financial transactions and supports authorities in tracking suspicious money flows.
What do crypto service providers have to do?
Crypto service providers in Europe, including BISON, are legally required to increase transparency in the context of transfers:
- Identification of sender and recipient: Crypto service providers must verify the identity of individuals transferring crypto assets. This includes information such as names, addresses, and dates of birth.
- Data storage: Collected data must be stored and retained for a specified period. In cases of suspicion, this ensures traceable access to transaction data.
- Reporting obligations: For suspicious amounts, crypto platforms are required to report these transfers as suspicious activities.
- Compliance and monitoring: Crypto service providers must have appropriate risk management and compliance programs in place to ensure adherence to all regulations.
What changes for me at BISON?
With the Transfer of Funds Regulation taking effect, BISON and all other crypto service providers within the EU have implemented adjustments to meet the new regulatory requirements.
When transferring crypto assets, it is now necessary for you to provide additional information, including:
- Is a self-hosted wallet involved in the crypto transfer?
For deposits and withdrawals exceeding €1,000 involving self-hosted wallets, you must verify ownership through a “proof-of-ownership” process. Ownership verification is required once per year and will be conducted digitally when necessary. Please note that the Satoshi test for UTXO blockchains (BTC, LTC, ADA, BCH, DOGE) is valid for 6 instead of 12 months due to technical limitations. - Is another crypto provider involved?
For transfers to another CASP, you must inform us, as BISON will need to transmit additional personal data (e.g., your first and last name, address, or birthdate) to the other CASP. These details must be complete and accurate to ensure a smooth transfer. Please check your BISON profile under Settings > Profile to confirm your details are up to date.
What information do I need to provide?
For crypto deposits:
- Proof-of-ownership if the transfer of crypto assets exceeds a total value of €1,000 and is made from a self-hosted wallet.
- Where applicable, information about the sender if the other crypto service provider has transmitted incomplete data.
For withdrawals:
- Cryptocurrency
- Amount
- Blockchain destination address
- Confirmation that you are the beneficial owner of the recipient wallet
- Whether you are transferring to a crypto service provider or to a self-hosted wallet
- Proof-of-ownership for total values exceeding €1,000
What exactly does proof-of-ownership mean?
Proof-of-ownership verifies that a wallet genuinely belongs to you for transactions exceeding €1,000. This applies to both deposits and withdrawals. Even individual transfers below €1000 that collectively exceed this threshold within a short time frame are subject to the same requirement.
How does proof-of-ownership work at BISON?
To prove ownership of your private wallet, you can choose between three verification methods at BISON:
- Satoshi Test
- Digital Signature
- Automated Ownership Proof
Satoshi-Test
With the Satoshi Test, you prove ownership of your private wallet through a microtransaction. To do this, you transfer a predefined amount of cryptocurrency from your self-hosted wallet to a target wallet address specified by BISON. These are small amounts within a predefined range, randomly selected by BISON within that range. For Bitcoin transfers, for example, the amounts range between 550 and 1,550 Satoshis. You can find the Satoshi Test ranges per cryptocurrency here.
Important information: To ensure the Satoshi Test runs smoothly at all times, please retain an amount of crypto assets on your private wallet in accordance with the Satoshi Test ranges for both deposits and withdrawals.
Once you have successfully transferred the cryptocurrency, this serves as proof of ownership of your wallet. You will then immediately see the transferred crypto assets in your BISON portfolio. The microtransaction amount required for the Satoshi Test will be credited to your BISON app.
Please note:
- Any blockchain fees incurred during this microtransaction are your responsibility.
- The deposit or withdrawal process, including the Satoshi Test, may take up to 5 business days.
In the following video, you can see how the Satoshi Test works at BISON for deposits:
Please note that the Satoshi Test works the same way for withdrawals.
Digital Signature
With this verification method, BISON provides you with a message to sign, which you digitally transfer to your private wallet with a signature function, e.g. Ledger Live or MetaMask. After confirming with your wallet’s private key, a cryptographic value is generated that serves as the signature in the BISON app. This provides secure proof of your ownership. Support for this method depends on your software wallet.
Please note that the digital signature is currently available for the following coins:
- Bitcoin (BTC)
- Ethereum (ETH) and all ERC-20 tokens
- Polygon (POL)
- Ripple (XRP)
- Algorand (ALGO)
- Solana (SOL)
- Stellar (XLM)
- Cardano (ADA)
- Polkadot (DOT)
Step-by-step guide to digital signing:
- Copy the message provided by BISON.
- Open your private wallet (e.g. Ledger Live, MetaMask, Electrum, or any other wallet with a signing function).
- Navigate to the “Sign Message” or “Message Signing” function.
- Paste the message provided by BISON.
- Sign the message using your wallet’s private key.
- Copy the generated signature (a cryptographic value) and paste it into the BISON app.
- Done! Please proceed with password entry and two-factor authentication.
Complete the digital signing within 1 hour. Otherwise, the sigPlease complete the digital signature within 1 hour. Otherwise, the signature will be reset and you will need to repeat this step. nature will expire and you will need to repeat the process.
In the following video, you can see how to use the digital signature at BISON:
Automated Ownership Proof
The Automated Ownership Proof procedure is designed to make creating the digital signature easier for you.
You can select the Automated Ownership Proof as a third proof of ownership verification method in the crypto delivery or deposit process.
Step-by-step guide for Automated Ownership Proof:
- Select Automated Ownership Proof in the BISON app or web application as the verification method.
- Select the app of your wallet provider.
- You will be redirected to your wallet app.
- Confirm the linking of your wallet with the BISON app.
- Click Continue in the BISON app.
- The message to be signed is transferred to your wallet.
- Confirm the signing of the message in your wallet app.
- The signed message is automatically transferred to the BISON app.
- Done! Your wallet is verified. Your withdrawal/deposit will continue.
More information about Automated Ownership Proof can be found here:
https://support.bisonapp.com/hc/en-gb/articles/35045809217053-Automated-Ownership-Proof
Is it necessary to provide additional proof for crypto transfers?
Have more questions?
For additional questions, please check our FAQs.