The largest US-based cryptocurrency exchanges will launch a user data exchange system in order to strengthen their anti-money laundering efforts.
In August, leading cryptocurrency exchanges, Coinbase, Gemini, Kraken and Bittrex, will publish a roadmap detailing methods to facilitate compliance with FATF requirements for countering money laundering and terrorist financing through cryptocurrencies. This was officially announced by Coinbase CEO Jeff Horowitz at the Global Digital Finance conference on July 15.
The user data exchange system will operate as a bulletin board to which trading platforms could connect and exchange data via a peer-to-peer network. This will allow crypto exchanges to increase the transparency of transactions and identify addresses involved in illegal activities. Through this data system, crypto exchanges will be able to find out personal information about owners of certain wallet addresses. Its peer-to-peer architecture will prevent hackers from intercepting information.
In June 2019, the FATF published guidelines for the regulation of virtual asset service providers (VASP). According to those recommendations, providers should collect identification information about both recipient and sender of transactions worth more than $1000 and transfer this information along with the transaction itself. The BitGo processing service also participates in the project.