Address ownership tackles a specific problem within the Travel Rule: self-hosted wallet transactions. Unlike virtual asset service providers (VASPs), which hold virtual assets on behalf of the owner, self-hosted wallets allow the owner to hold virtual assets and control the private key used to transact themselves.
Self-hosted wallets are a greater challenge when it comes to requesting and storing personal data since there is no organisation behind it, and expecting every individual who owns a wallet to store the personal information of their counterparts and the transaction is unfeasible. Moreover, it would pose a big risk regarding data security.
The closest solution so far is requesting to prove ownership of a self-hosted wallet when depositing or withdrawing from a VASP. This means VASPs have the responsibility to validate that their customer owns a given self-hosted wallet and store this proof.