How to verify destination wallet ownership for Travel Rule compliance

The Travel Rule is a FATF requirement for Virtual Asset Service Providers (VASPs), established in 2019 and updated in 2021. For withdrawals to self-custodial wallets, it requires you to verify the user controls the destination address before the transfer proceeds.

This guide shows you how to verify that a user controls their self-custodial destination wallet before allowing a withdrawal from your exchange, using Reown AppKit.

Implementation

Follow the Reown AppKit Travel Rule guide to implement SIWX, a two-step flow where the user connects their wallet and signs a message to prove they control the destination address.

User flow

When using a Ledger signer through WalletConnect:

1. The user is redirected to Ledger Wallet to sign the message.
2. Once signing is complete, they are returned to the exchange via WalletConnect.

Verify your integration

After completing the AppKit Travel Rule guide, confirm that:

• Withdrawals above the applicable threshold require a successful SIWX signature before the transfer is allowed
• Transfers are blocked if the user rejects the wallet connection or the sign-message prompt
• Your implementation stores a compliance record (wallet address, signature, verification timestamp, transaction hash) for each verified withdrawal