Why The Travel Rule Is One Of The Most Significant Regulations In Crypto Unchained

Dave Jevans, CEO of CipherTrace, and Siân Jones, Senior Partner at XReg Consulting, give the lowdown on the Financial Action Task Force’s travel rule and how it applies to businesses in the crypto space. They discuss:

their background and journey into crypto

what the travel rule is

the consequences for countries that are not compliant

whether the regulation will apply to staking providers in the future

the type of companies and transactions that will be covered under the travel rule

the type of information that has to be provided 

how banks comply with the travel rule and whether crypto companies can use the same system

the different open standards available for sharing information

how the information will get shared between entities who use different travel rule solution providers

the “sunrise problem” in which different companies implement their compliance systems at different times

the security of user data being shared between different entities

how it applies to central bank digital currencies and centralized stablecoins

how the rule would affect privacy coins

the inherent contradiction between the cypherpunk philosophy and regulatory compliance

unintended consequences of the travel rule

how the travel rule may play out in the coming years

A glossary of terms discussed in the episode: 
FATF: Financial Action Task Force, an intergovernmental organization that develops policies to combat money laundering and terrorist financing
VASP: virtual asset service providers, who are custodial entities that run fiat-to-crypto or crypto-to-crypto exchanges, or run businesses related to transfer and safekeeping of virtual assets and financial services.
FinCEN: Financial Crimes Enforcement Network, the United States federal bureau that analyzes information about financial transactions in order to fight money laundering, terrorist financing, and other financial crimes
FCA: Financial Conduct Authority, the financial regulatory body of the UK
 
Thank you to our sponsors! 
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Tezos: https://tquorum.com/
 
Episode links: 
Dave Jevans: https://twitter.com/davejevans
CipherTrace: https://ciphertrace.com/
Sian Jones: https://twitter.com/COINSULT
XReg Consulting: https://www.xreg.consulting/
Financial Action Task Force (FATF): https://www.fatf-gafi.org/
 
The Osaka conference where crypto got serious about FATF’s travel rule: https://www.coindesk.com/inside-the-osaka-conference-where-crypto-got-serious-about-fatfs-travel-rule
 
Will Osaka be crypto’s Bretton Woods moment? https://forkast.news/will-osaka-be-cryptos-bretton-woods-moment/
 
InterVASP Messaging Standard: https://intervasp.org
OpenVASP: https://openvasp.org
OpenVASP white paper: https://openvasp.org/wp-content/uploads/2019/11/OpenVasp_Whitepaper.pdf?cache=1
 
FATF report on “so-called stablecoins”: http://www.fatf-gafi.org/media/fatf/documents/recommendations/Virtual-Assets-FATF-Report-G20-So-Called-Stablecoins.pdf
 
OKEx’s Korea arm delisted privacy coins: https://www.theblockcrypto.com/post/39724/okex-korea-delisting-all-privacy-coins-including-monero-zcash-and-dash-as-these-violate-fatfs-travel-rule
 
Some of the potential FATF compliance solutions: 
Travel Rule Information Sharing Alliance (TRISA): https://trisa.io/
Coinbase’s messaging board solution: https://www.theblockcrypto.com/daily/72293/coinbase-exchanges-fatf-travel-rule-solution
CoolBitX: https://www.theblockcrypto.com/post/56853/coolbitx-raises-16-75m-series-b-to-help-crypto-exchanges-comply-with-fatfs-travel-rule

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