A slew of prominent exchange platforms are joining a new anti-money laundering initiative.
According to a recent blog post by leading crypto exchange Coinbase, it and other popular trading platforms such as BlockFi, Circle, Robinhood, Fidelity Digital Assets, Gemini and Kraken will join the Travel Rule Universal Solution Technology (TRUST), a joint solution created to comply with the U.S. Financial Crimes Enforcement Network’s (FinCEN) Travel Rule.
The Travel Rule requires financial institutions to collect and retain certain information related to funds transfers and transmittals in amounts of $3,000 or more.
According to Coinbase, the TRUST initiative aims to make compliance to the Travel Rule a new industry standard.
“The Travel Rule requires financial institutions to share certain basic information about their customers when sending funds over a certain amount to another financial institution.
Custodial cryptocurrency exchanges (like other financial institutions) have to satisfy this rule, which was written before crypto even existed.
To do this, a leading group of crypto exchanges came together to create a solution in the crypto space, while continuing to protect the security and privacy of our customers’ personal information.
This unprecedented effort led to a jointly designed solution, TRUST, which we hope will soon become the industry standard for complying with these requirements.”
Though TRUST members will gather sensitive information on users, no central storage of personal data will occur to ensure security and privacy, according to Coinbase.
“We never centrally store sensitive customer information where it could be targeted by an attacker or misused by a third party.
The required information is only directly sent from one TRUST member to another, through end-to-end encrypted channels, and the receiver is required to safeguard it.”
Coinbase says TRUST will soon be expanding into global jurisdictions as well, but no timeline has been give as of yet.
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