Binance is set to enhance crypto compliance and interoperability with traditional legal and financial systems through its recent partnership with the Global Travel Rule (GTR) Alliance. This alliance merges virtual-asset service providers using the same solution to comply with critical international anti-money-laundering rules.
Joining the GTR Alliance means greater levels of data security and regulatory compliance for Binance, aligning with the Financial Action Task Force’s (FATF) Recommendation 16, also known as the Travel Rule. This reporting requirement is already enforced in various countries and is predicted to become a universal standard in the coming years.
Binance recognizes the importance of a regulated environment in dispelling negative perceptions about crypto, protecting users, and encouraging broader adoption of crypto assets. Their collaboration with GTR ensures user data remains safe and private.
The GTR creates a secure platform for companies to navigate FATF Travel Rule requirements by offering a global solution, secure encrypted channels, and a seamless one-time integration, therefore promoting interoperability and standardized compliance in the digital-asset space.
In terms of data security, GTR provides VASPs with control over their decryption keys while applying Keccak256 encryption to all Personal Identifiable Information (PII), transforming sensitive user data into unique identifiers. The platform eliminates plaintext PII storage and uses mutual transport layer security (mTLS) technology for transmission, which enhances the security framework.
By joining GTR, Binance can collaborate with other compliance-focused industry leaders like CODE, Sygna, and Sumsub. This move aims to enhance trust within the crypto ecosystem and tackle collective compliance needs.