18 Crypto Firms Join Hands For Anti-Money Laundering Initiative

Leading cryptocurrency firms such as Coinbase, Kraken, Gemini and Bittrex said they will offer an anti-money laundering solution to help businesses comply with the Financial Action Task Force's anti-money laundering Travel Rule.

A coalition of 18 cryptocurrency firms and exchanges announced the formation of the Travel Rule Universal Solution Technology on Wednesday. These firms are trusted by institutional investors such as Anchorage, Avanti and Zodia Custody.

TRUST was known as the U.S. Travel Rule Working Group among the crypto AML specialists before its official launch.

TRUST will enable cryptocurrency exchanges to securely submit information mandated by the Financial Action Task Force, according to details released by Coinbase, Paxos and others.

TRUST develops an all-inclusive compliance framework to address money laundering and terrorist funding concerns while simultaneously safeguarding the privacy and security of consumers' data.

The FATF Travel Rule requires all Virtual Asset Service Providers to send detailed client data between counterparties for transactions exceeding a specific limit. By creating TRUST, the 18 organizations will be better equipped to adhere to the Travel Rule while meeting their consumers' expectations regarding how their data is handled.

The TRUST solution does not rely on a central repository for personal data; it transmits information directly from one TRUST member to another over end-to-end encrypted channels.

TRUST also offers a way for a receiving exchange to authenticate a particular crypto address owner before sending client information. This guarantees that the correct information is delivered to the right exchange, adding to the system's security.

According to the TRUST release, the next stage is to recruit more partners so that TRUST can provide full compliance throughout the crypto sector.

Compliance with the FATF's Travel Rule is critical for crypto firms that want to serve consumers across borders. Tether, the stablecoin issuer, revealed intentions in October to incorporate Notabene's Travel Rule solution to help track cross-border transactions.

Compliance with international anti-money laundering legislation will become increasingly crucial as the crypto business expands.