The Riffle
On 28 October 2026, the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) issued Notice No. FSRA/FCCP/206/2026, providing operational guidance on Travel Rule compliance for Virtual Asset (VA) and Fiat-Referenced Token (FRT) transfers.
Addressed to Senior Executive Officers (SEOs) and Money Laundering Reporting Officers (MLROs), the Notice clarifies regulatory expectations under Section 10.3 of the Anti-Money Laundering and Sanctions Rulebook.
While it does not introduce new legal obligations, the Notice reinforces the need for effective governance, risk-based controls, and documented compliance processes.
Key Highlights
1. Stronger Governance and Compliance Controls
Firms must maintain documented policies and procedures covering the collection, verification, transmission, and retention of transfer information.
This includes systems to identify missing information, counterparty due diligence, periodic control testing, senior management reporting, and records that allow transactions and compliance decisions to be reconstructed.
2. Technical Challenges Do Not Exempt Compliance
The FSRA acknowledges challenges arising from differences in jurisdictional implementation, system interoperability, and technical limitations.
However, these challenges do not reduce or remove a Firm's Travel Rule obligations.
This includes the sunrise issue, where jurisdictions implement Travel Rule requirements at different stages.
Firms must assess these differences, understand the regulatory status of relevant jurisdictions, and apply appropriate risk-based measures.
3. Accountability for Third-Party Solutions
Using external Travel Rule technology providers or transmission protocols does not transfer regulatory responsibility.
Firms must assess vendor suitability, validate counterparty connectivity, identify system coverage gaps, and ensure that third-party solutions adequately support their compliance obligations.
4. Managing Missing Information and Counterparty Failures
Where required transfer information is missing or incomplete, Firms must assess the associated financial crime risks and determine appropriate actions.
These may include requesting additional information, delaying transfers, rejecting or returning transactions where technically feasible, or escalating concerns to Compliance or the MLRO.
Repeated or systemic failures by counterparties may require heightened controls, including restricting transfers or reconsidering business relationships.
Systemic failures by originating institutions to provide required transfer information must be reported to the FSRA.
5. Enhanced Controls for Unhosted Wallets
Under Rule 10.3.6, transfers involving unhosted wallets require enhanced risk management measures.
Firms must apply Enhanced Customer Due Diligence (CDD), use blockchain analytics to identify transaction risks, and restrict or delay transfers where information is insufficient or risks cannot be adequately mitigated.
The Notice also reinforces the requirement for independent reviews of Travel Rule compliance frameworks at least annually, with identified deficiencies addressed promptly.
Why It Matters
The Notice highlights the FSRA's focus on ensuring that Travel Rule compliance is effectively implemented across the entire transfer process.
For ADGM-regulated Firms, this means that technical limitations, cross-border regulatory differences, or dependence on third-party solutions cannot justify compliance gaps.
Firms should review their existing policies, strengthen counterparty assessments, evaluate technology solutions, and ensure that exceptions, escalations, and compliance decisions are appropriately documented.
Key Takeaway
FSRA Notice No. 206 of 2026 reinforces that Travel Rule compliance extends beyond the transmission of information.
For Firms undertaking Virtual Asset and Fiat-Referenced Token transfers, effective governance, risk-based decision-making, enhanced due diligence, and independent oversight remain essential to meeting regulatory expectations.
