18 giants of the crypto industry have formed a new initiative to counter money laundering and set new regulatory standards.
Coinbase, the biggest crypto exchange in the US, announced in a blog post the launch of the Travel Rule Universal Solution Technology (TRUST), which is an “industry-driven solution designed to comply with a requirement known as the Travel Rule while protecting the security and privacy of our customers.”
The Travel Rule is part of the Bank Secrecy Act, and requires all financial institutions to pass on certain information to the next financial institutions in certain funds transmittals.
Coinbase says that the group hopes that the initiative’s ethos will soon become the industry standard for complying with these requirements.
The organization includes:
Anchorage, Avanti, Bitgo, bitFlyer, Bittrex, BlockFi, Circle, Coinbase, Fidelity Digital Assets, Gemini, Kraken, Paxos, Robinhood, Standard Custody & Trust, Symbridge, Tradestation, Zero Hash and Zodia Custody.
While much of the mechanics of the initiative remain vague, Robinhood’s Chief Operating Officer Christine Brown said in a statement that TRUST would be “an innovative compliance solution, while also persevering the integrity of private customer data.”
“Just as it takes a community of crypto investors and enthusiasts to democratize finance, we believe it takes a community of crypto businesses and platforms to work together to find a solution to preserve customer privacy while meeting the legal requirements of the Travel Rule,” she said.
Coinbase
Coinbase says that to help each member of the group reach desired standards, it’s partnered with Exiger, a New York-based company specializing in financial security and technology, regulatory compliance, and risk management.
“We require all TRUST members to meet core anti-money laundering, security, and privacy requirements before joining the solution. And we are partnering with Exiger… to help us meet that bar, and to provide ongoing compliance support.”
“There are two components to this solution,” Gemini’s Chief Compliance Officer Elena Hughes said. “There’s the ability to identify who’s on the other side of the transfer prior to initiating it. Secondly, there’s no centralized storage of personal data. So we don’t send it via a centralized repository; instead the information is exchanged on a bilateral basis.”
TRUST is so far only relevant to US markets, but will seek to expand elsewhere in the future, according to Coinbase and Hughes’ of Gemini. There are currently plans to expand in Canada, Singapore and Germany.
