Coinbase has launched the Travel Rule Universal Solution Technology (TRUST), an industry-driven solution designed to comply with a requirement known as the Travel Rule while protecting the security and privacy of our customers. TRUST is a platform that allows cryptocurrency exchanges to securely send information legally required by the Travel Rule.
The solution is named TRUST because that’s what it seeks to instil in customers when they use the member companies’ products and services.
The current U.S. TRUST membership includes the following: Anchorage, Avanti, Bitgo, bitFlyer, Bittrex, BlockFi, Circle, Coinbase, Fidelity Digital AssetsSM, Gemini, Kraken, Paxos, Robinhood, Standard Custody & Trust, Symbridge, TradeStation, Zero Hash, and Zodia.
“As a subsidiary of Standard Chartered, we are far beyond being bank grade – we are actually part of a banking group,” explained Zodia Custody CEO Maxime De-Guillebon. “We are the most connected cryptoasset custodian in the world. Being a part of the TRUST ecosystem gives our clients even greater flexibility, while still operating in a completely safe and secure environment. We now deliver Travel Rule connectivity across multiple ecosystems: Travel Rule Protocol, OpenVASP, and now the TRUST ecosystem. Institutional asset owners and asset managers have the qualified custody solution they need to access, safekeep and settle this new asset class.”
Why is TRUST necessary?
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 customers’ personal information. This unprecedented effort led to a jointly designed solution, TRUST, which it is hoped will soon become the industry standard for complying with these requirements.
What was the goal in designing the TRUST solution, and how was it achieved?
The core goal in designing TRUST was to achieve top-tier compliance with the Travel Rule, while fully honouring customers’ expectations over how their information is handled. To do this, important safeguards were incorporated as part of the TRUST solution:
There is no central store of personal data: TRUST never centrally stores 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.
TRUST includes a mechanism for the receiving exchange to prove that it’s the owner of the receiving crypto address before customer information is sent–to ensure that the right information is sent to the right exchange.
All TRUST members are required to meet core anti-money laundering, security and privacy requirements before joining the solution. TRUST is partnering with Exiger, a global market leader in technology-enabled compliance and risk management solutions, to help it to meet that bar, and to provide ongoing compliance support.
Now that TRUST has launched, what are the next steps?
It boils down to adding new members, so that TRUST can provide comprehensive compliance across the crypto industry. The Travel Rule’s reach is expanding internationally, and so must the TRUST solution. TRUST is focused on expanding to many other jurisdictions this year.
The launch of TRUST does seem to demonstrate that top-tier compliance can go hand-in-hand with a core industry value—robust protection of customer privacy and security. We will monitor developments here with interest.