Payment giant PayPal has joined the Coinbase-led compliance initiative called Travel Rule Universal Solution Technology (TRUST). Launched in 2022, the solution was created to “protect the security and privacy” of its members’ customers in compliance with the Travel Rule.
The latter is a US law that requires financial institutions and companies to share certain information about a customer if they send money above a threshold. As Coinbase explained when the compliance solution was launched, cryptocurrency exchanges and others must adhere to this rule.
PayPal joins Amber Group, Anchorage Digital, Binance.US, bitFlyer, BitGo, Bittrex, BlockFi, BlocPal, Circle, Crypto.com, Robinhood, Tetra Trust, Voyager, Kraken, Gemini, Consmart, Netcoins, Nexo, Paxos and others members comprising a total of 38.
Cryptocurrency exchange Coinbase said the following in this announcement:
PayPal has been a leader in digital payments for over 20 years leveraging technology to make financial services and commerce more convenient, convenient and secure for more than 400 million consumers and merchants worldwide (…). The addition of PayPal marks another milestone in TRUST’s journey to become the global and industry standard solution for travel rules compliance.
TRUST provides its members with a suite of tools and features, such as proof of ownership and “full compliance” with travel rules. Therefore, its members can prevent any problems with the US authorities.
According to the official website, members must meet certain security and privacy standards to be included in TRUST. This included meeting anti-money laundering and customer knowledge (KYC) requirements before joining.
Coinbase and other members announced a partnership with technology compliance firm Exiger to “help meet these requirements.” On the solution, its website states the following:
Information is sent directly from one TRUST member to another, through end-to-end encrypted channels. TRUST never centrally stores sensitive customer information where it could be targeted by an attacker or misused by third parties.
Is Coinbase Losing the Trust of the Crypto Community?
Coinbase’s compliance solutions and partnerships have been in the spotlight for several months. As reported by Bitcoinist in June, rumors were circulating about an alleged partnership between the exchange platform and the US Immigration and Customs Agency (ICE).
According to rumors, the exchange platforms were selling user data to the government agency. A Coinbase representative denied the rumors claiming that all data offered to ICE is public.
However, a portion of the cryptocurrency community expressed concern and was more concerned in the months that followed as the US and international watchdogs cracked down on the cryptocurrency industry harder. Governments around the world appear to be pushing for a crypto space where users must transact in complete transparency while losing their privacy rights.