The Travel Rule (FATF Recommendation 16) requires that anyone moving funds over a threshold — $1,000 in the US, €1,000 in the EU, 100,000 JPY in Japan — attach the originator's and beneficiary's identity to the transaction. It was written for wire transfers in 1996. In 2019 FATF clarified it applies to virtual assets too, which means USDC payouts above the threshold need an IVMS-101 message attached.
In practice that means: when Baynoy pays out USDC from your account to a counterparty wallet over $1k, we package the merchant's verified KYC fields (name, country, account ref) into the standardized IVMS-101 JSON and post it to the receiving VASP's Travel Rule endpoint (Notabene, Sumsub, TRP). If the recipient is self-hosted, we collect a wallet-ownership signature instead — recommended by FATF guidance VA-15.
You do not have to think about any of this. Travel Rule routing happens server-side. The merchant just sees the payout succeed. The compliance log is queryable in the admin for the seven-year retention window required by BSA recordkeeping.