As part of the Global Travel Rule Alliance, the platforms use a single solution to share transaction data

Binance joins the crypto exchange community for AML compliance

26.03.2024 - 10:18

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2 min

What’s new? Crypto exchange Binance has joined the Global Travel Rule Alliance, which is a global community of virtual asset service providers that use a single solution to comply with one of the key international anti-money laundering rules called the Travel Rule. This Financial Action Task Force (FATF) rule requires companies to share customer information when making transfers to identify suspicious transactions.

Press release

What else is known? Joining the GTR Alliance will provide a higher level of data security and compliance, Binance officials wrote. This strategic move is intended to bring the exchange in line with FATF recommendation 16 on compliance with reporting standards, better known as the Travel Rule, which is already in use in many countries and will become a universal standard in the coming years.

Binance notes that a regulated environment is critical to protecting users, increasing trust in the cryptocurrency industry, and encouraging its widespread adoption, and the GTR Alliance provides a secure, seamless environment to comply with the international standard. For instance, the organization offers a single platform with global reach that ensures interoperability between different crypto exchanges while providing a robust mechanism to protect customer data.

For example, under the GTR Alliance solution, member companies gain full control over their decryption keys and guarantee transaction verification by applying Keccak256 encryption to all identifying information. This method converts sensitive user data into irreversible unique identifiers, eliminating the possibility of storing such data in plaintext. The transmission of such hashed information is accomplished using mutual transport layer security (mTLS) technology with a zero-trust model.

The company said that this collaboration strengthens the trust, security, and transparency that users can count on at Binance.

Last November, Binance agreed to pay $4,3 billion in fines to US regulators. Founder Changpeng Zhao stepped down as CEO and pleaded guilty to violating anti-money laundering rules, he could face up to 18 months in prison. The verdict will be announced on April 30.

Also in March, the Nigerian authorities accused the exchange of tax evasion and said that more than $20 billion was laundered through it.

Since September 1 last year, the British financial regulator obliged local crypto firms to comply with the Travel Rule from FATF.

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