Key Takeaways
The Travel Rule is a global regulation that requires crypto platforms to collect and share information about crypto transactions.
Some Binance users must verify wallet ownership before sending or receiving crypto from certain platforms.
The Satoshi Test helps users meet Travel Rule requirements by sending a small test transaction.
Once a wallet address is verified, users don’t need to repeat the process every time.
This makes crypto transfers faster, safer, and easier.
Introduction
As crypto becomes more popular, governments and regulators want to make sure it is not used for illegal activities. One important rule that helps with this is called the Travel Rule.
While the Travel Rule improves security, it can make crypto transfers slower and more complicated. To solve this problem, Binance introduced the Satoshi Test. This feature helps users verify wallet ownership using a small crypto transfer, making the process smoother and more user-friendly.
What Is the Travel Rule?
The Travel Rule, also known as FATF Recommendation 16, is an international regulation for crypto platforms, also called Virtual Asset Service Providers (VASPs).
When users send crypto between platforms that follow the Travel Rule, certain information must be shared, such as:
The sender’s name and wallet address
The recipient’s name and wallet address
Account numbers or transaction IDs
Because of this rule, platforms like Binance must confirm that the receiving wallet actually belongs to the correct person or platform.
What Is the Satoshi Test?
The Satoshi Test is a simple way to verify a wallet address. Instead of filling out forms or uploading documents, users send a very small amount of crypto to the recipient’s wallet.
If the recipient confirms receiving the funds, the wallet is verified. After that, users can send larger amounts without repeating the process.
How the Satoshi Test Works
The user starts a withdrawal to a new or unverified wallet address.
Binance may ask the user to complete a Satoshi Test.
The user sends a small test amount (for example, 0.00001 BTC).
The recipient confirms the transaction details on their platform.
Once confirmed, the wallet address is verified and ready for future use.
Why the Satoshi Test Is Important
The Satoshi Test offers several benefits:
Less hassle: No long verification processes
More security: Confirms the wallet belongs to the right person
Faster transfers: Verified addresses can be reused easily
Better compliance: Helps users and Binance follow global regulations
The Address Management Feature on Binance
Binance also provides an Address Management feature that lets users save and label wallet addresses. This helps prevent mistakes and makes withdrawals faster.
Users can combine Address Management with the Satoshi Test for even better security and convenience.
How to Add a New Address to the Address Management List
1.Log in to your Binance account and go to the Address Management page. You can also find it by navigating to [Account] → [Security] → [Withdrawal Whitelist].
2.Click [Add Address] to add a new withdrawal wallet address.
3. Add a label name to the address and fill in the information.
4. Depending on the case, you might be required to verify the address.
5. Follow the instructions and complete the Satoshi Test (if requested).
For more details, users can check the Binance FAQ.
Example Scenario
Suppose a user wants to send BTC from Binance to another exchange for the first time. Because of the Travel Rule, Binance needs to verify the receiving wallet.
Instead of a long verification process, the user sends a tiny amount of BTC using the Satoshi Test. Once the recipient confirms the transaction, the user completes the full transfer and saves the address for future use.
Next time, sending BTC to the same address will be quick and easy.
Final Thoughts
The Satoshi Test is a smart and practical solution for Travel Rule compliance. It helps users verify wallet ownership with minimal effort while keeping transactions secure and fast.
By using the Satoshi Test and Binance’s Address Management feature, users can enjoy smoother crypto transfers while staying compliant with international regulations.
