Cryptocurrency regulations are tightening worldwide, in response to this several crypto firms, including Coinbase, Gemini, and Robinhood, are looking for ways to form a compromise. The crypto exchange platforms are collaborating with the U.S. government to set up a platform that would facilitate in meeting U.S. money-laundering standards, Bloomberg reported.
The platform, ‘TRUST,’ was set up by a group of 18 companies seeking 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 transactional 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,”
stated Elena Hughes, CCO of Gemini.
The group considers the regulations to be outdated and agree that the current agencies in place lack the appropriate knowledge to supervise the sector.
The platform operates using different software, not based on blockchain, to which cryptocurrencies are traded. On the TRUST platform, data isn’t centralized, and client information is sent exclusively between members.
“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,”
explained 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 the Treasury’s Financial Crimes Enforcement Network only proposed to apply the regulation to cryptocurrencies in 2020.