Cryptocurrency regulations are tightening worldwide, thus several crypto firms, including Coinbase (NASDAQ:COIN), Gemini, and Robinhood (NASDAQ:HOOD) are looking for ways to compromise. The crypto exchange platforms are collaborating with the U.S. government to set up a platform that would meet U.S. money-laundering standards, Bloomberg reported.
The platform TRUST, set up by a group of 18 companies, seeks to comply with the U.S. Treasury Department’s Travel Rule, which obligates firms to disclose confidential information such as customer names, account numbers, and transaction dates of transfers.
“We believe that the solution will allow for top-tier compliance for the travel rule, and we are looking to get buy-in from our regulatory authorities,” said Elena Hughes, CCO of Gemini.
The group considers the regulations outdated and agreed that current agencies don’t have the knowledge to supervise the sector.
The platform operates in different software, not blockchain, in which cryptocurrencies are traded. In TRUST, the data isn’t centralized, and the client information is sent exclusively from one member to another.
“What makes TRUST unique is it’s the most industrywide solution to the problem. It’s an excellent example of the industry actually coming together to solve these problems on its own,” said Paul Grewal, legal officer of Coinbase.
Other firms such as Fidelity Digital Assets, Kraken, and Paxos have also decided to join TRUST.
On the Flipside
- The Travel Rule has been in place in the U.S. since 1996, but only in 2020, Treasury’s Financial Crimes Enforcement Network proposed to apply the regulation to cryptocurrencies.
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