Coinbase, Kraken and Robinhood are participating in the launch of Travel Rule Universal Solution Technology (TRUST), an initiative that seeks to address the anti-money laundering (AML) data sharing requirements recommended by the Financial Action Task Force (FATF) and prescribed by the Financial Crimes Enforcement Network (FinCEN).
The companies that are initially part of TRUST are: Anchorage, Avanti, Bitgo, bitFlyer, Bittrex, BlockFi , Circle, Coinbase , Fidelity Digital Assets SM, Gemini, Kraken, Paxos, Robinhood, Standard Custody & Trust, Symbridge, Tradestation, Zero Hash and Zodia Custody.
The group of companies announced Wednesday that they have outlined a plan to comply with the new FATF “travel rule,” which requires financial institutions to collect information on the sender (and sometimes the receiver) of transactions worth more than USD $3,000 between financial institutions.
As such, TRUST will enable cryptocurrency exchanges to securely submit the information legally required by the Financial Action Task Force.
The initiative will oblige its members to use end-to-end encryption when sending data to each other and to never store customer information in a way that could be vulnerable to third-party attacks. It also establishes a set of minimum security practices.
In an interview for CoinDesk, Gemini’s chief compliance officer, Elena Hughes, said the group’s compliance framework is based on two main “components”:
“There is the ability to identify who is on the other side of the transfer before initiating it. Secondly, there is no centralized storage of personal data. So we don’t send it through a centralized repository; instead, the information is exchanged bilaterally.”
Hughs added that TRUST’s plan is to expand to other global jurisdictions, as well as add new members.
The group’s goal is also to become an industry standard for compliance with the Travel Rule.
As CoinDesk noted, until now, there has only been one standard agreed upon by the cryptocurrency industry, the Inter-VASP Messaging Standard, known as IVMS 101.
Trust a joint effort
The companies consulted with FinCEN, the U.S. Treasury Department’s financial crimes unit, to develop the proposal, Coinbase attorney Paul Grewal said. The group also partnered with Exiger, a technology platform focused on regulation and financial crime, to drive the compliance protocol.
Grewal also noted that he expects other crypto companies to join in the coming months. The initial listing notes the absence of notable firms such as exchanges Binance and FTX.