On Wednesday, the publicly-listed cryptocurrency firm Coinbase announced the launch of a collaborative effort called TRUST, which stands for “Travel Rule Universal Solution Technology.” The plan is described as an “industry-driven solution” developed to comply with the Financial Action Task Force (FATF) Travel Rule. There are currently 18 crypto firms that have joined TRUST so far, and the collaborative effort is welcoming other companies to join the initiative.
18 VASPs Launch TRUST in Order to Comply With FATF’s Travel Rule
For quite some time now, FATF’s Travel Rule has been a top concern within the crypto industry as virtual asset service providers (VASPs) have been told they need to comply with the regulatory policy. As cryptocurrency has grown more popular, FATF has been releasing guidelines on the Travel Rule, as the intergovernmental organization believes the rule needs to be applied to VASPs.
Essentially, the ‘Travel Rule’ is a descriptive label for the regulatory guideline that aims to curb illicit transactions and money laundering. The rule mandates that all companies that deal with finances have to pass on KYC/AML transmission data concerning their customers’ identities to the next financial institution. The transfer amount tied to FATF’s Travel Rule has a threshold that’s equal to $3,000 or higher.
In a blog post published on Wednesday, Coinbase explains that it has crafted a new plan called TRUST with a slew of other well known VASPs. “Travel Rule Universal Solution Technology” or the TRUST collaborative effort includes VASPs such as Robinhood, Fidelity Digital Assets, Tradestation, Zero Hash, Bittrex, Coinbase, Gemini, Avanti, Circle, Bitflyer, Zodia Custody, Paxos, Anchorage, Symbridge, Bitgo, Kraken, Blockfi, and Standard Custody & Trust.
“The core goal in designing TRUST was to achieve top-tier compliance with the Travel Rule, while fully honoring customers’ expectations over how their information is handled,” Coinbase detailed. The plan called TRUST follows the 17 crypto firms that launched a similar collaborative effort called the Crypto Market Integrity Coalition (CMIC). That specific coalition, launched last week, said it has plans to “promote public and regulatory confidence in the new asset class.”
TRUST Partners With Global Compliance and Risk Management Provider Exiger, Travel Rule-Focused Plan Aims to Expand to ‘Many Other Jurisdictions’
The TRUST plan highlighted three fundamentals to the effort’s compliance solution. The first is the TRUST members “never centrally store sensitive customer information” and secondly TRUST will leverage a mechanism that utilizes “proof of address ownership.” Moreover, TRUST members must have “core security [and] privacy standards.” The Coinbase blog post adds:
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, a global market leader in technology-enabled compliance and risk management solutions, to help us meet that bar, and to provide ongoing compliance support.
Now that the TRUST has been launched, the collaborative initiative will continue to add members and the blog post notes that the Travel Rule’s reach is “expanding internationally, and so must the TRUST solution.” During the next 12 months, the group plans to expand to “many other jurisdictions,” according to the Coinbase announcement.
What do you think about the recently formed TRUST and the organization’s Travel Rule goals? Let us know what you think about this subject in the comments section below.
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Source: https://news.bitcoin.com/coinbase-and-17-other-crypto-firms-launch-travel-rule-universal-solution-technology/