Aug 4, 2020
Why The Travel Rule Is One Of The Most Significant Regulations In Crypto - Ep.184
Play • 1 hr 15 min

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! 

Crypto.com: https://www.crypto.com 

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

Notabene: https://www.coindesk.com/crypto-identity-startup-notabene-launches-trust-framework-for-fatf-travel-rule

ING: https://www.coindesk.com/in-banking-first-ing-develops-fatf-friendly-protocol-for-tracking-crypto-transfers


Recent travel rule meeting: https://www.coindesk.com/fatf-meets-wednesday-to-discuss-travel-rule-for-digital-assets

Bitcoin Improvement Proposal (BIP) 75: https://github.com/bitcoin/bips/blob/master/bip-0075.mediawiki


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