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What happened

Your payout required a Travel Rule message to the receiving institution, but the institution rejected it before the on-chain broadcast. No funds were moved. The payout is in a terminal failed state with failureCode: TRAVEL_RULE_REJECTED. 
{
  "type": "TRAVEL_RULE_REJECTED",
  "title": "Travel Rule counterparty rejected",
  "status": 422,
  "detail": "The counterparty rejected the Travel Rule transfer before broadcast.",
  "resolution": "Confirm beneficiary details with the recipient institution and submit a new payout once the underlying issue is resolved.",
  "docs": "/errors#travel-rule-rejected",
  "instance": "/v2/payouts/txn_abc123/travel-rule/counterparty",
  "correlationId": "corr_xyz789",
  "timestamp": "2026-01-15T09:30:00.000Z"
}

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Common causes

  • Unrecognized beneficiary — the receiving institution could not match the destination address or account to a known entity
  • Policy mismatch — the originating or beneficiary information did not meet the receiving institution’s compliance requirements
  • Unsupported corridor — the receiving institution does not accept Travel Rule messages for the requested corridor

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Recovery

This is a terminal state. The payout cannot be recovered; a new payout must be submitted.
1. Inspect the failure detail Read the payout to get the failureMessage field, which carries the institution’s rejection reason when one was provided: 
curl -X GET https://api.conduit.financial/v2/payouts/txn_abc123 \
  -H "x-api-key: YOUR_API_KEY"
The failureMessage is the institution-supplied reason (if present). When absent, contact your account manager for the raw rejection detail. 2. Investigate the destination Verify the destination address is associated with a regulated custodian that participates in Travel Rule messaging. Unhosted wallets or unsupported custodians cannot be matched during the Travel Rule exchange. 3. Submit a new payout to a different destination Once the issue is resolved, submit a new payout with a corrected or alternative destination: 
curl -X POST https://api.conduit.financial/v2/payouts \
  -H "x-api-key: YOUR_API_KEY" \
  -H "Idempotency-Key: idem_NEW_KEY" \
  -H "Content-Type: application/json" \
  -d '{
    "customerId": "cus_abc123",
    "assetAmount": {"code": "USDC", "amount": "100.000000", "chain": "ETHEREUM"},
    "destination": {
      "recipient": {
        "rail": "CRYPTO",
        "chain": "ETHEREUM",
        "address": "0xnew..."
      }
    }
  }'

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Prevention

  • Verify destination eligibility — confirm the destination address belongs to a custodian that supports Travel Rule before submitting high-value transfers
  • Handle transaction.failed with this code — use failureCode === 'TRAVEL_RULE_REJECTED' to branch on this specific terminal state and surface the failureMessage to the relevant party
The transaction.failed event fires when the payout terminates: 
{
  "type": "transaction.failed",
  "data": {
    "transactionId": "txn_abc123",
    "failureCode": "TRAVEL_RULE_REJECTED",
    "failureMessage": "Beneficiary institution rejected the transfer: unrecognized address"
  }
}
failureMessage carries the institution-supplied reason when one was provided. When absent, the rejection had no machine-readable message.