Coinbase, Robinhood and Other Big Crypto Firms Announce Plan on Money Laundering, Privacy

New anti-money laundering requirements in the form of FATF's "travel rule" have been looming over the crypto industry. Read the full article by Jeff John Roberts

Nothing is more often tied to money laundering than cryptocurrencies. Even the popular Netflix show Ozark, starring Jason Bateman has mentioned using crypto in their money-laundering operations for the cartel. While the show is fictional this is 100% still true that crypto is used by bad people to hide their illicit activities.

The Financial Action Task Force (FATF) has announced new rules when it comes to anti-money laundering and major players in crypto are set to comply. Coinbase, Robinhood, and Circle are among those who will be helping in the fight against “terrorist financing.” This will bring new rules in effect to the “travel rule” which requires banks to collect information about the sender of over $3,000 between financial institutions.

Some crypto companies have been working on what they call TRUST or the Travel Rule Universal Solution Technology. This will help member companies use end-to-end encryption when sending data to each other. It will also never store customer information and establishes minimum security practices.

Coinbase’s lawyer, Paul Grewal, said that the companies involved were consulted by FinCen while developing the TRUST proposal. This is a step in the right direction but there are issues that still remain. One of the major issues that come up is how do you get these Defi companies to comply with this? The reality is that you can’t and that is why they are decentralized. It will be the user’s choice for better or worse if something like that is to happen.

This is good for the centralized crypto space as it gives the exchanges and companies involved more credibility with retail and old-school investors. More compliance and regulatory frameworks will be coming and the best thing the centralized entities can do is follow suit for the time being.