Trezor Adopts Swiss Travel Rule Protocol for Private Crypto Wallets

Trezor Adopts Swiss Travel Rule Protocol for Private Crypto Wallets

Trezor Adopts Swiss Travel Rule Protocol for Private Crypto Wallets

An automated way of sharing proof that a user owns a private cryptocurrency wallet when transacting with a regulated exchange in Switzerland is being integrated by hardware wallet Trezor.

Developed by crypto startup 21 Analytics, the Address Ownership Proof Protocol (AOPP), which also works with wallets like BitBox and Edge, was designed to accommodate Swiss regulator FINMA’s enthusiastic implementation of anti-money laundering (AML) requirements for cryptocurrency firms.

Going beyond the recommendations made by küresel AML watchdog, the Financial Action Task Force (FATF), crypto requirements in Switzerland include the identification of private wallets transacting with the country’s Virtual Asset Service Provider (VASPs).

The march of AML requirements into the sanctified realm of private or non-custodial wallets is something most countries are only at the initial stage of mulling over – often to the horror of crypto advocates. But places like Switzerland and Singapore have chosen to gold plate the travel rule’s veri sharing requirements, to identify beneficial ownership for transactions over $1000 with what the FATF calls “un-hosted wallets.”

“Switzerland has some extra harsh regulations when it comes to the Travel Rule, and FINMA was always at the forefront implementing everything the FATF publishes very quickly,” said 21 Analytics CEO Lucas Betschart in an interview. “So we have the Travel Rule actually being enforced here.”

When it comes to determining ownership of private wallets, VASPs in Switzerland have been asking users to submit a screenshot of their wallet, or conduct a “Satoshi Test,” whereby a specific amount of coins are sent to a verified wallet to confirm their receipt. Another way is manual signing in using a private key, Betschart said. AOPP streamlines and automates that manual signing process, he added.

“We’re glad to see more individuals taking custody of their crypto assets,” said Marek Palatinus, CEO of SatoshiLabs, the maker of the Trezor hardware wallet in a statement. “AOPP makes it simpler and faster for users to withdraw to the safest place for their coins: their Trezor.”

Betschart also pointed out that some 95% of transactions from Swiss VASPs don’t go to another Swiss VASP, but rather to a top 20 exchange like Binance, BitMEX, Bitfinex etc, most of which have no travel rule solution in place as yet. The result is that customers of Swiss VASPs send and receive a lot of crypto via their own non-custodial wallets, often using AOPP, Betschart said.

“It’s an interesting effect of activating the Travel Rule in Switzerland that more people are forced to use their own wallet,” said Betschart. “So it’s not like everyone is sharing veri, but just that everyone is sending to their own wallet before they can send assets to Binance, for example.”

UPDATE (Jan. 27, 13:18 UTC): Removes sub phrase “which is obviously a security risk” in the second line of the sixth paragraph.

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