PayPal Joins TRUST Network Along With Crypto Heavy Hitters

PayPal joins TRUST network along with crypto heavy hitters and has stepped up its regulatory compliance. This will streamline its reporting requirements relating to the digital asset “travel rule”.

Joining TRUST

PayPal joins TRUST network i.e. the Travel Rule Universal Solution Technology (TRUST) network, following a slew of other cryptocurrency heavyweights in moving to comply with digital asset travel restrictions.

The news comes two months after PayPal put out infrastructure in June to let users to move, send, and receive digital assets between PayPal and other wallets and exchanges. Prior to that, consumers could only purchase and sell cryptocurrency through Paypal, which entered the market in October 2020.

Now you can easily use your crypto with PayPal. Bring it into PayPal and send some to friends and family—all in one place. https://t.co/k24TVHoSYh pic.twitter.com/v0CeV9dNXa

— PayPal (@PayPal) August 15, 2022

Big Day For TRUST

TRUST was founded in February by a consortium of 18 U.S. virtual asset service providers (VASPs), with early participants including Coinbase, Paxos, Circle, Kraken, and Robinhood. Now that Paypal has joined the ranks, the number has grown to 38.

“The addition of PayPal marks another milestone in TRUST’s journey to become the global, industry-standard solution for Travel Rule compliance,” was noted by Coinbase in an August 23 announcement.

U.S. VASPs are legally compelled to pass on specified information pertaining to client cash transfers from one financial institution to another under Bank Secrecy Act (BSA) rule 31, sometimes known as the “Travel rule.” The starting point for detecting financial transactions and the persons behind them is $1,000.

Circle’s twitter account posted:

“Big day for the Travel Rule Universal Solution Technology (TRUST) network as we welcome digital payment lender @PayPal. Our industry-driven solution to balancing Travel Rule compliance with protecting customer privacy & security is now 38 members strong.”

As a result, a group of US VASPs formed TRUST to streamline reporting and make information exchange between them easier and more transparent. TRUST employs a system that consists of two primary components: a centralized bulletin board for identifying each VASP participant on both ends of a transaction and an encrypted point-to-point (P2P) channel for securely exchanging data.

The organization was founded in response to the Financial Action Task Force’s (FATF) suggestion in June 2021 for VASPs worldwide to embrace particular principles in order to preserve compliance with anti-money laundering (AML) and anti-terrorist financing (ATF) laws.

Other Dilemmas

In their FAQ page, PayPal stated that it has fraud protection and Paypal Purchase Protection on eligible purchases from online stores where the service is accepted. This means that purchases will be protected when checking out with crypto.

They also stated that selling crypto (even checking out with crypto) is a taxable transaction, so be sure to report gains and losses and crypto sales when your respective tax season comes up. Be sure to also check local regulations as well.

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