The TRP seeks compliance with the FATF travel rule on exchange users, with this tool, the aim is to make it easier for exchanges to share their customer data.
The Travel Rule Protocol (TRP), a group that includes traditional financial institutions, released version 1.0.0 of an API (Application Programming Interface). The purpose of this organization led by global banks is to guarantee compliance with the Financial Action Task Force (FATF) travel rule in Bitcoin and cryptocurrency companies, reducing their privacy.
The TRP, made up of more than 20 institutions, including Standard Chartered, ING Bank, and Fidelity Digital Assets, refers to its API as a “minimal, feasible and pragmatic way to comply with the FATF Travel Rule promptly”.
The Travel Rule stipulates that Bitcoin and other cryptocurrency exchanges must share their clients’ data for transactions that exceed $ 1,000; this as part of a policy against money laundering and terrorist financing.
Through its website, the TRP states that this is just the beginning of a long journey. “By creating a first-generation solution for compliance with the FATF travel rule, we aim to help the industry take some of the first steps on that journey while recognizing that there will be many steps to come,” he says.
The philosophy behind this tool is one of “full compliance” with the FATF provisions through direct data exchange between two parties seeking “minimal data leakage.” That is, it is contemplated that certain data are susceptible to being exposed.
The mechanism used by this API is a messaging system called InterVASP (IVMS-101), developed especially for the compliance protocols of the Travel Rule.
With this system, there is the option of an automated system to share data or one in which the user must accept it before a transaction on a determined platform.
More organizations bow to the FATF regulation on Bitcoin
Since the creation of the Travel Rule, there are several countries and service providers with Bitcoin that have joined its compliance. Among the most relevant organizations that have done so, BitGo stands out, a company that operates with Bitcoin exchanges in more than 50 countries.
BitGo announced in July that it would join the compliance with this regulation, which dates from June 2019 and since then has generated a lot of controversy in the bitcoin environment due to its implications against user privacy.
The exchanges Huobi and Bitfinex have also recently joined, as well as their partner company Tether, an issuer of the stablecoin pegged to the dollar USDT. According to another TRP spokesperson quoted by Coindesk, the travel rule compliance group has four large exchanges and large technology companies in its ranks.
By: Jenson Nuñez.