Paypal has stepped up its regulatory compliance by joining TRUST to streamline its reporting requirements relating to the digital assets “travel rule.”
Crypto-friendly digital payments giant Paypal has been added to the Travel Rule Universal Solution Technology (TRUST) network, joining a host of big names in crypto that have moved to comply with digital asset travel rules.
The announcement comes two months after the payments giant rolled out infrastructure enabling users to transfer, send and receive digital assets between PayPal and other wallets and exchanges in June this year. Prior to that, users were only able to buy and sell crypto within Paypal following the firm’s initial jump into the sector in October 2020.
Now you can easily use your crypto with PayPal. Bring it into PayPal and send some to friends and family—all in one place. https://t.co/k24TVHoSYh pic.twitter.com/v0CeV9dNXa
— PayPal (@PayPal) August 15, 2022
TRUST was launched by a group of 18 U.S. virtual asset service providers (VASPs) in February, with heavy hitters such as Coinbase, Paxos, Circle, Kraken, and Robinhood participating from the get-go. The number has since expanded to 38 now that Paypal has joined the ranks.
“The addition of PayPal marks another milestone in TRUST’s journey to become the global, industry-standard solution for Travel Rule compliance,” Coinbase noted in an Aug. 23 announcement.
Under the Bank Secrecy Act (BSA) rule 31, more commonly known as the “Travel rule”, U.S. VASPs are legally required to pass on specific information relating to customer fund transfers from one financial institution to another. The threshold for identifying fund transfers, and the people behind them, start at $1,000.
Big day for the Travel Rule Universal Solution Technology (TRUST) network as we welcome digital payment leader @PayPal. Our industry-driven solution to balancing Travel Rule compliance with protecting customer privacy & security is now 38 members strong. https://t.co/OybFRjbmwU pic.twitter.com/eKmAYHBoLQ
— Circle (@circlepay) August 22, 2022
As such, the group of U.S. VASPs launched TRUST to streamline reporting and make the sharing of information between them easier and more transparent. TRUST utilizes a solution which is composed of two main features; a centralized bulletin board to identify each VASP party on both ends of a transaction and encrypted point to point (P2P) channel to securely exchange data.
Related: Self-regulatory orgs for crypto keep ecosystem afloat pending clear regulations
The group was formed in response to a recommendation from the Financial Action Task Force (FATF) in June 2021 for VASPs across the globe to adopt specific principles in order to maintain compliance with anti-money laundering (AML) and anti-terrorist financing (ATF) policies.