Crypto firms, including Coinbase, Gemini, are working together to comply with U.S. money laundering rules

Coinbase Global Inc., Gemini Trust Co. and Robinhood Markets Inc. are among the companies that are helping to create a platform to enforce U.S. money laundering rules as crypto and financial technology companies seek to meet existing requirements and abandon tighter controls.

A group of 18 companies is creating a platform to help comply with the U.S. Treasury Department’s “travel rule,” which requires financial firms to provide information including customer names, account numbers and transfer transaction dates. The coalition has held talks with US and global regulators about its plan, said Elena Hughes, CEO of Gemini crypto platform.

“We believe that the decision will ensure compliance with the rules of travel at the highest level, and we want to get support from our regulators,” Hughes said in an interview.

Cryptocurrency-related firms have said the rules are outdated and existing agencies have no experience to oversee the sector. Meanwhile, rulemakers are pushing for tighter controls. Rustin Ben, chairman of the Commodity Futures Trading Commission, and Gary Hensler, chairman of the Securities and Exchange Commission, called for more aggressive oversight.

The group’s initiative, known as Travel Rule Universal Solution Technology, is a separate platform from blockchains through which cryptocurrencies are transmitted. There will be no central repository of personal data, and customer information is sent directly from one member to another, the group said in a statement.

While private software vendors offer some compliance solutions, the group believes its offer is the best, said Paul Grual, Coinbase’s chief legal officer, in an interview.

“What makes TRUST unique is the most industry-wide solution to the problem,” he said. “It’s a great example of the industry really coming together to solve these problems on their own.”

The Treasury Travel Rules have been in place since 1996. In 2020, the Department’s Financial Crimes Network proposed an amendment that extends this rule to crypto-transactions.

Other companies in the TRUST network include Fidelity Digital Assets, Kraken and Paxos.

– Yue Yang and Olga Kharif (Bloomberg Mercury)