Coinbase, BlockFi, Kraken Team Up on Anti-Money Laundering Initiative
An 18-member cohort of crypto companies has announced the launch of TRUST, the Travel Rule Universal Solution Technology.
- A group of 18 crypto companies have launched TRUST, the Travel Rule Universal Solution Technology.
- The new solution will help companies comply with the Financial Action Task Force's anti-money laundering Travel Rule.
- TRUST's plans to add new members so that it can provide comprehensive compliance across the crypto industry.
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Several major crypto companies have collaborated to launch a new anti-money laundering solution. The Travel Rule Universal Solution Technology aims to help companies comply with the Financial Action Task Force’s Travel Rule.
Crypto Companies Launch TRUST
Some of the crypto industry’s biggest companies have teamed up to tackle money laundering.
A group of 18 crypto companies and exchanges announced the launch of the Travel Rule Universal Solution Technology Wednesday, an anti-money laundering solution that will help these companies comply with the Financial Action Task Force’s anti-money laundering Travel Rule.
Announcements posted by Coinbase, Paxos, and others, detail how TRUST will allow cryptocurrency exchanges to securely send information legally required by the Financial Action Task Force. TRUST creates a comprehensive compliance framework to address money laundering and terrorist financing concerns while also ensuring the security and privacy of users’ personal information.
The companies listed in the TRUST announcement include the crypto exchanges Coinbase, Gemini, Kraken, and Bittrex, as well as other crypto custody companies used by institutional investors such as Anchorage, Avanti, and Zodia Custody.
Under the FATF Travel Rule, all Virtual Asset Service Providers are required to transmit specific customer data between counterparties for transactions over a certain threshold. By forming TRUST, the 18 companies will be better able to comply with the Travel Rule while honoring customers’ expectations over how their information is handled.
The TRUST solution will not use a central store of personal data and instead sends information directly from one TRUST member to another through end-to-end encrypted channels. Additionally, TRUST includes a mechanism for a receiving exchange to prove that it is the owner of a certain crypto address before customer information is sent. This ensures the right information is sent to the right exchange, further bolstering the system’s security.
According to the TRUST announcement, the next step is adding new members so that TRUST can provide comprehensive compliance across the crypto industry. Notably, leading crypto exchanges Binance and FTX are currently absent from the TRUST members list. It is unknown whether these exchanges plan to join TRUST in the future or implement their own Travel Rule compliance procedures.
Compliance with the FATF’s Travel Rule is important for crypto companies aiming to service customers across country borders. In October, stablecoin issuer Tether announced plans to integrate Notabene’s Travel Rule solution to help it track cross-border transactions. As the crypto industry grows, compliance with international anti-money laundering regulations is set to become increasingly important.
Disclosure: At the time of writing this piece, the author owned ETH and several other cryptocurrencies.