Coinbase, a publicly-traded cryptocurrency company, has unveiled the debut of TRUST, which stands for “Travel Rule Universal Solution Technology.”
The strategy is touted as an “industry-driven solution” developed to comply with the FATF Travel Rule. TRUST presently has 18 crypto enterprises as members, and the collaborative effort is welcoming new organizations to embrace the endeavor.
In order to Comply with the FATF’s Travel Rule, 18 VASPs have Introduced TRUST
The Travel Rule of the FATF has been a source of concern for the crypto industry, with virtual asset service providers (VASPs) being told that they must follow the regulatory guidelines. FATF has been issuing guidance on the Travel Regulation as bitcoin has increased in popularity, as the intergovernmental organization feels the rule should be applied to VASPs.
Essentially, the term “Travel Rule” refers to a regulatory rule aimed at preventing illegal activities and money laundering. According to the rule, all businesses that deal with money must transmit KYC/AML transmission data about their clients’ identities to the next financial institution. The transfer amount connected to the FATF’s Travel Rule has a $3,000 or higher barrier.
Coinbase notes that it has collaborated with a number of other well-known VASPs to create a new scheme called TRUST. 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 are part of the TRUST joint effort.
TRUST’s main goal was to achieve top-tier compliance with the Travel Rule while also fully satisfying customers’ expectations about how their data was managed, according to Coinbase.
TRUST is a follow-up to a similar collaborative initiative dubbed the Crypto Market Integrity Coalition, which was formed by 17 crypto businesses (CMIC). The group, which was formed just last week, has stated that it intends to “increase public and regulatory confidence in the new asset class.”
TRUST Teams Up With Exiger, a Global Compliance and Risk Management Company, to Develop a Travel Rule-Focused Plan That Will Expand to ‘Many Other Jurisdictions
Three key elements of the effort’s compliance solution were underlined in the TRUST strategy. The first is that TRUST members “never keep critical customer information centrally,” and the second is that TRUST will rely on a “proof of address ownership” approach. TRUST participants must also adhere to “fundamental security and privacy criteria.” In addition, according to the Coinbase blog:
Before joining the solution, we need all TRUST members to achieve core anti-money laundering, security, and privacy requirements. Exiger, a global industry leader in technology-enabled compliance and risk management solutions, is partnering with us to assist us to accomplish that goal as well as providing due diligence support.
The TRUST effort will continue to grow now that it has been introduced, and the blog post states that the Travel Rule’s reach is “growing internationally, and so must the TRUST solution.” According to the Coinbase release, the company expects to expand to “many other jurisdictions” during the next 12 months.