The Financial Action Task Force’s (FATF) Travel Rule has long been a source of anxiety in the crypto business. Virtual asset service providers (VASPs) have been advised that they must comply with the regulatory guidelines. FATF has been issuing guidance on the Travel Regulation as bitcoin has increased in popularity, since the intergovernmental body feels the rule should be applied to VASPs.
The ‘Travel Rule’ is essentially a descriptive title for a regulatory guideline aimed at reducing illegal activities and money laundering. The rule requires all organisations that deal with money to transmit KYC/AML transmission data about their clients’ identities to the next financial institution. The transfer amount linked to the FATF’s Travel Rule has a threshold of USD 3,000 or higher.
Coinbase says in a blog post that it has created a new plan called TRUST in collaboration with a plethora of other well-known VASPs. VASPs like as Robinhood, Fidelity Digital Assets, Tradestation, Zero Hash, Bittrex, Coinbase, Gemini, Avanti, Circle, Bitflyer, Zodia Custody, Paxos, Anchorage, Symbridge, Bitgo, Kraken, Blockfi, and Standard Custody & Trust are part of the TRUST joint effort.
“The main aim in building TRUST was to ensure top-tier compliance with the Travel Rule while completely fulfilling consumers’ expectations about how their information is handled,” explained Coinbase. The TRUST strategy follows the establishment of a similar joint effort named the Crypto Market Integrity Coalition by 18 crypto businesses (CMIC).