On Wednesday, the cryptocurrency firm Coinbase, which opened on the stock exchange, announced the launch of a joint venture called TRUST, which stands for “technology for universal travel rules.” The plan is described as an “industrial solution” developed in accordance with the travel rules of the Financial Action Task Force (FATF). Currently, 18 crypto-firms have joined TRUST, and a joint effort welcomes other companies to join the initiative.
18 VASP launch TRUST to comply with FATF Travel Rule
For quite some time now, the FATF Travel Rule has been a major problem in the crypto industry, as virtual asset service providers (VASPs) have been told that they must comply with regulatory policies. As cryptocurrency becomes more popular, the FATF is issuing recommendations on the Travel Rules, as the intergovernmental organization believes that this rule needs to be applied to the VASP.
In essence, the “Travel Rule” is a descriptive label for regulatory guidance that aims to stop illegal transactions and money laundering. The rule stipulates that all finance companies must transfer KYC / AML data relating to the identity of their customers to the next financial institution. The transfer amount tied to the FATF Travel Rule has a threshold of $ 3,000 or higher.
In a blog post published Wednesday, Coinbase explains that it has developed a new plan called TRUST with many other well-known VASPs. “Universal Travel Rule Technology” or TRUST’s collaborative efforts include 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 main goal in the development of TRUST was to achieve the highest level of compliance with the Rules of Travel, while fully meeting customer expectations regarding how their information is processed,” – explained in detail in Coinbase. The plan, called TRUST, is being followed by 17 crypto firms that have launched a similar joint effort called the Crypto Market Integrity Coalition (CMIC). This particular coalition, formed last week, said it had plans to “promote public and regulatory confidence in the new asset class”.
TRUST collaborates with Exiger’s Global Compliance and Risk Management Provider, a travel-focused plan aimed at expanding into “many other jurisdictions”
The TRUST plan identified three foundations for the decision to maintain efforts. First, TRUST members “never store centrally confidential customer information,” and second, TRUST will use a mechanism that uses “proof of address ownership”. Moreover, TRUST members must have “basic security [and] privacy standards ”. The Coinbase blog post adds:
We demand that all TRUST members meet the basic anti-money laundering, security and privacy requirements before joining the decision. And we are working with Exiger, a global market leader in technology control and risk management solutions, to help us achieve this plan and provide ongoing compliance support.
Now that TRUST has been launched, the joint initiative will continue to add participants, and the blog post notes that the coverage of travel rules is “expanding internationally, as is the TRUST decision”. Over the next 12 months, the group plans to expand to “many other jurisdictions,” according to a Coinbase announcement.
What do you think about the newly created TRUST and the goals of the Travel Rule? Let us know what you think about this topic in the comments section below.
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